Babatunji Wusu-
- Global trade is projected to surpass $34 trillion in 2024, with an annual growth rate of 3% over the next five years.
- Countries’ trade behavior can be categorized as autarky, hegemony, bilateralism, or multilateralism.
- The USA’s trade relationship with China has been marked by fluctuations, particularly due to trade wars.
- Nigeria’s trade relations with the USA and China are significant, with crude oil exports to the USA making up a large portion of its export economy.
- 2024 has seen Nigeria achieve its highest foreign trade balance since 2019, driven by growth in petroleum exports.
- The Nigerian economy’s future in global trade will rely on the development of agriculture, manufactured products, and digital services.
Global trade remains a critical driver of economic development, influencing relationships across nations and fostering international cooperation. In 2024, global trade is expected to reach over $34 trillion, growing at an annual rate of 3%. Countries engage in trade through varying approaches, including autarky, hegemony, bilateralism, or multilateralism. The geopolitical shifts of 2024, with changes in political leadership in several developed countries, have led to adjustments in trade practices worldwide.
Historically, trade has played a key role in shaping the global economy. The United States, transitioning from a British colony to a global power by the late 19th century, significantly influenced trade dynamics. The country’s role in the post-World War II era, alongside its bilateral relationship with China, continues to be pivotal in global trade affairs. The USA and China have had a fluctuating trade relationship, with trade wars emerging in the past decade. However, with the election of the 47th U.S. President, new trade policies, including the “America First” policy, are likely to further impact these relations.
For Nigeria, a review of its trade policies in line with these global shifts presents a key opportunity. According to the Nigerian Bureau of Statistics (NBS), the USA remains Nigeria’s second-largest export partner, with crude oil accounting for nearly 88% of total exports. Meanwhile, China remains a dominant source of imports, contributing over 22% of Nigeria’s total import value in 2024. Nigeria’s foreign trade balance has improved in 2024, marking the highest trade balance in both Naira and USD terms since 2019, driven largely by increased petroleum exports.
The performance of Nigeria’s foreign trade indicates that the country’s economy has potential for growth, especially in sectors such as agriculture, manufactured products, and services. The global export market for services, which grew by 9% in 2023, contrasts with a decline in goods exports, presenting an opportunity for Nigeria to diversify its export portfolio.
As Nigeria looks ahead, achieving further trade surpluses will require collaboration between the public and private sectors to address key challenges, including border management, exchange rate stability, security, and access to growth capital. By focusing on strategic sectors like agriculture and manufacturing, Nigeria can position itself as a leader in African trade.
