How Nigeria Can Contribute to Global Multilateralism in Trade

The global trade landscape is at a critical juncture. Multilateral trade systems like the World Trade Organization (WTO) play a crucial role in ensuring open, fair, and predictable trade rules. However, challenges such as rising protectionism, the dominance of regional trade blocs, and an increasingly fragmented global economy threaten the effectiveness of these systems. Emerging economies, including Nigeria, now have a unique opportunity to shape the trade agenda by advocating for inclusivity, fairness, and resilience in the face of these challenges. Nigeria’s economic potential is undeniable, but its trade narrative is often marred by challenges: under-utilised export opportunities, inadequate infrastructure, and global market shifts. Despite these hurdles, the country is uniquely positioned to contribute meaningfully to global trade frameworks. Nigeria can leverage its position as Africa’s largest economy by actively advocating for policies that ensure fair trade practices within the continent and globally. But what does it take for Nigeria to move from being a passive participant to an active player?

Nigeria's Current Role in Global Trade

To understand Nigeria's role in global trade, it’s essential to examine both its strengths and limitations. The country’s exports are dominated by petroleum products, which make up 90% of its total, tying its fortunes closely to global oil markets. Key trade partners like India, Spain, and the Netherlands reflect Nigeria’s importance in energy supply chains, yet this reliance on crude oil exposes the economy to price volatility. On the import front, Nigeria depends on goods like mineral products, machinery, and chemical products, with China accounting for 22.7% of its imports. While its trade deficit has narrowed to $3.8 billion in 2024, down from $16.4 billion in 2020, imbalances persist, highlighting the need for economic diversification. Regionally, Nigeria plays a leading role within ECOWAS, contributing 70% of the bloc’s GDP. Nigeria is actively working to eliminate trade barriers and strengthen regional integration, advancing initiatives like the African Continental Free Trade Area (AfCFTA), which will create a more unified and efficient African market. By reducing oil dependency, strengthening industrial capacity, and leveraging regional agreements, Nigeria can elevate its standing in global trade and contribute meaningfully to multilateral frameworks. While Nigeria’s current trade role presents challenges, these can be transformed into opportunities through strategic actions and broader regional cooperation.

Opportunities for Nigeria to Lead in Multilateral Trade

Diversification of Exports: With 90% of exports tied to oil, the urgency of diversification is clear. Initiatives like the Zero-Oil Initiative aim to expand Nigeria’s export base by focusing on high-potential sectors such as agriculture, solid minerals, and petrochemicals. Diversification isn’t just about resilience—it’s about transforming raw materials locally, such as turning cocoa into chocolate or cashews into finished goods. These value-added exports can boost revenues and create jobs while solidifying Nigeria’s foothold in global markets. Nigeria’s geographic location gives it a strategic advantage as the gateway to West Africa. Through active participation in regional agreements like AfCFTA and ECOWAS, Nigeria has the potential to lead regional integration, foster South-South trade, and build stronger ties within Africa and beyond.

Strengthening Regional Ties: Nigeria’s role in African trade is at a turning point, with the AfCFTA framework offering a chance to unlock $50 billion in opportunities for local businesses through initiatives like the Guided Trade Initiative. This move isn’t just about opening doors; it’s about creating smoother, more structured access to continental markets. However, challenges like poor infrastructure, from roads to port facilities, continue to slow progress. By tackling these gaps, Nigeria can lead the way in streamlining cross-border commerce. Harmonizing trade policies and sharing expertise in agriculture and manufacturing with smaller African economies can also help foster stronger regional ties. On the home front, supporting local industries through tax breaks and trade finance solutions ensures businesses can compete effectively. Add to this transparent billing and a robust dispute resolution system, and Nigeria stands ready to drive not just its growth but the continent’s economic future.

Advocating Fair Trade Policies: Nigeria stands at the forefront of advocating for fair trade practices on the global stage, leveraging its position as Africa’s largest economy to champion the interests of developing nations. At the World Trade Organization (WTO), Nigeria can amplify its voice by forming alliances with like-minded countries to advocate for Special and Differential Treatment (SDT). This approach provides developing nations with the flexibility to implement trade agreements in line with their unique economic challenges. Nigeria’s leadership in the African Continental Free Trade Area (AfCFTA) is a testament to the power of regional cooperation. By showcasing AfCFTA’s successes, such as enhanced intra-African trade, Nigeria can inspire similar frameworks worldwide, strengthening the collective bargaining power of smaller economies. Highlighting the challenges of non-tariff barriers—like complex regulations—Nigeria can advocate for capacity-building programs that equip developing nations with the tools to thrive in global markets. Active participation in policy dialogues and research initiatives further strengthens its position, shedding light on the unique struggles of emerging economies.

These opportunities require strategic actions that have been successfully implemented in other regions. By looking at the experiences of countries like Vietnam, Malaysia, and Botswana, Nigeria can identify best practices to overcome its challenges and accelerate its transformation within AfCFTA.

Learning from Case Studies

Vietnam, Malaysia, and Botswana offer invaluable lessons as Nigeria navigates its role within AfCFTA. Each showcases how strategic decisions can transform trade landscapes and drive economic growth. Vietnam’s rise highlights the power of export-led growth and strategic partnerships. By actively participating in ASEAN and securing bilateral agreements like the CPTPP and EU-Vietnam Free Trade Agreement, Vietnam expanded its market access. Its focus on key export sectors like textiles and electronics created a dynamic trade environment. Nigeria can take a cue by diversifying exports and pursuing bilateral deals that open doors to global markets. Malaysia demonstrates the impact of blending regional cooperation with multilateral diplomacy. Its initiatives, like BIMP-EAGA, showcase the benefits of sub-regional trade collaboration. At the global level, Malaysia has championed equitable trade practices through the WTO. Nigeria can emulate this dual approach by advocating for fair global trade policies while strengthening regional ties within ECOWAS. Botswana exemplifies the benefits of regional integration and export diversification. Through SACU and SADC, it accessed duty-free trade and expanded markets. Its export diversification beyond diamonds to agriculture and manufacturing highlights how focusing on multiple sectors reduces economic dependency. Together, these examples provide Nigeria with a rich blueprint for maximizing AfCFTA’s potential and achieving sustained growth.

Key Takeaways: Nigeria must focus on diversifying its exports, strengthening regional ties, advocating for fair trade policies, and leveraging regional agreements like AfCFTA to lead Africa’s economic transformation.

 

Conclusion

Nigeria’s active participation in AfCFTA is not just a trade strategy but a critical pathway toward long-term economic resilience. By learning from global success stories and leveraging its inherent strengths, Nigeria has the opportunity to lead Africa into a new era of integration, equity, and prosperity. The road ahead will demand dedication—from refining policies and investing in infrastructure to advocating for fair trade on the global stage. The rewards are immense: diversified economies, job creation, and stronger partnerships both within Africa and across the globe