Nigeria must lead AfCFTA amid global trade fragmentation
By Olisa Agbakoba & Collins Okeke The post-World War II international trade architecture is undergoing its most profound shift since the Treaty of Westphalia established state sovereignty principles. Key changes
By Olisa Agbakoba & Collins Okeke
The post-World War II international trade architecture is undergoing its most profound shift since the Treaty of Westphalia established state sovereignty principles. Key changes have occurred: eroding multilateral consensus, de-dollarisation, rising alternative blocs, and the emergence of new economic powers.
There are implications for Nigeria in the African Continental Free Trade Area (AfCFTA) era.
Nigeria must choose: passively adapt or lead AfCFTA’s institutionalisation as a counter to fragmentation, positioning Africa as a unified bloc in a multipolar world.
Nigeria needs a dedicated trade ambassador, a national trade policy framework, and EU-style supranational AfCFTA bodies.
The post-WWII system rested on the WTO, Bretton Woods institutions, and the US dollar’s dominance. These pillars now crumble.
The WTO is paralysed: its Appellate Body has been defunct since December 2019 due to US vetoes on appointments.
The Doha Round’s two-decade failure highlights developed-developing divides. Major powers now favour preferential deals, spawning overlapping rules that fragment trade.
The dollar system faces weaponisation risks, as seen in Russia’s SWIFT exclusion post-Ukraine invasion.
China, Russia, India, and others push alternatives like China’s digital yuan and BRICS payment systems.
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New blocs emerge along geopolitical lines. The Regional Comprehensive Economic Partnership (RCEP), the world’s largest FTA by trade volume, includes China but excludes the US.
China’s Belt and Road Initiative (BRI), spanning 150+ countries with $1 trillion+ investments, builds a China-centric network across Eurasia and Africa.
AfCFTA, covering 54 African states, 1.3 billion people, and $3.4 trillion GDP, is the largest by countries, but lags in implementation due to non-tariff barriers, infrastructure gaps, and weak institutions.
Power has shifted: China’s GDP soared from $730 billion (1995) to $17+ trillion, making it the top trader for 120+ countries. G7’s global GDP share fell from 65% (1995) to 43% today.
Economic integration failed to foster political unity. US-China rivalry spans tech, economy, military, and ideology, evident in US CHIPS Act and semiconductor controls, subordinating trade to geopolitics.
The Fourth Industrial Revolution introduces data as a strategic asset, yielding clashing rules: China’s localisation, EU’s GDPR, US private governance, and splintering digital trade.
Globalisation’s uneven benefits favour capital owners and educated urbanites, while displacing factory workers, fuelling populism and blocking liberalisation.
The energy transition adds rifts: the EU’s Carbon Border Adjustment Mechanism acts as green protectionism. There is competition for lithium, cobalt, and rare earths fragments mineral markets.
Nigeria’s oil/gas exports dominate (80%+ earnings, 50%+ revenue), but the energy shift risks stranding assets and crashing revenues.
It imports 70%+ of manufactures; manufacturing’s GDP share dipped to ~9% amid population growth.
World Bank ranks it 131/190 in Trading Across Borders due to infrastructure, red tape, and unpredictability.
Yet AfCFTA offers transformation: a 1.3 billion-person, $3.4 trillion market enables industrialization scale and bargaining power, potentially creating millions of jobs.
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As Africa’s biggest economy and population, Nigeria’s role is pivotal for AfCFTA’s success. Swift implementation lets Nigerian firms seize continental shares.
Nigeria needs to appoint a cabinet-rank trade ambassador reporting to the president, chairing an inter-ministerial committee, leading AfCFTA/bilateral talks, and crafting a national trade policy framework.
Create a Trade Policy Analysis Unit for modelling agreements, advantage analysis, and monitoring. Build a cadre of trade experts in law, economics, and negotiation.
Develop an integrated framework linking trade, industry, fiscal, and monetary policies.
Targets: cut oil exports below 30% by 2030; lift manufacturing to 40% exports; raise intra-African trade to 35%; boost manufacturing to 20% GDP by 2035; add 5 million formal jobs by 2030.
Prioritise sectors like agro-processing, textiles, pharma, and digital services (fintech, e-commerce, creatives).
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For reforms to climb Trading Across Borders: modernise ports for 24/7 operations, cut clearance to less than five days; deploy single window systems; use risk-based customs; digitise to curb bribes.
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Shift Nigeria to AfCFTA leader: push for an AfCFTA Court of Justice (binding, complementing African Court); Trade Facilitation Authority; Competition Authority; Development Finance Mechanism.
Advocate for an AfCFTA Arbitration Centre like ICSID/LCIA, blending global standards with African customs.
Commit financially: boost AfCFTA budgets, second officials, host institutions, build coalitions.
Lead by example: eliminate non-tariff barriers, clarify tariff preferences, train on rules of origin, to prove benefits and spur reciprocity.
Solo, Nigeria can’t rival China, India, or the EU, who leverage blocs like RCEP, BRICS, EU institutions. Nigeria must build African institutions, strengthening AU, Pan-African Parliament, and courts, for a unified bloc coordinating with ECOWAS, SADC, etc.
This echoes Nkrumah and Gaddafi’s unity vision. Rev. Jesse Jackson saw Nigeria as Africa’s anchor; recently, UN Secretary General, António Guterres urged Vice President Shettima (Feb 13, AU Summit) to lead Africa to superpower status, backing Nigeria’s UNSC bid.
The window closes as regions consolidate. Nigeria must lead institution-building for Africa, not domination. History awaits this generation’s choice.
