International commerce, a key driver of economic growth, is closely linked to competitiveness. Numerous trade performance indexes measure national competitiveness. The creation and gradual integration of Global Value Chains (GVCs) have shaped international trade. GVCs are complex networks of production and commerce across nations that promote specialization and interdependence. In this framework, trade competitiveness factors shape countries’ GVC involvement. Economic theory and facts illuminate GVC development, a complex interaction of various causes (Ajide, 2023). A key driver is infrastructure, which allows commodities and services to traverse borders smoothly. The preceding section sets the ground to investigate how infrastructure and other variables have shaped GVCs.
Scholars like Gary Gereffi, John Humphrey, Fernando Amador, and Gary Sturgeon have helped explain GVCs and trade competitiveness. Gary Gereffi has studied GVC governance structures and how lead businesses and their strategy shape global production networks. John Humphrey has examined how adding competencies and innovations in GVCs might help nations raise the value chain (Gereffi, G. and Sturgeon, 2013: 350). Fernando Amador and Gary Sturgeon studied GVC measurement and analysis. Amador’s research supports Xiangchen Zhang’s findings that lowering transit, information, and transportation expenses drive GVCs. Gary Sturgeon’s value chain conceptualization and measurement methods help explain the complexity and interconnectedness of the industrial process.
According to WTO Deputy Director General Xiangchen Zhang, Aid for Trade and South-South cooperation are crucial for developing nations to increase their global trade responsibilities. The premise is that comparable nations may expand, move along the value chain, and diversify exports. Given this, it is crucial to study the academic literature and empirical data, including Gereffi, Humphrey, Amador, and Sturgeon, to truly comprehend how trade competitiveness factors like infrastructure have affected GVC dynamics (Humphrey and Michida, 2021: 20). These distinguished academics and other educational resources, including WTO, UNCTAD, and World Bank publications, will help us understand trade competitiveness’ theoretical foundations in the following sections.
The Enabling Trade Index, Logistics Performance Index, and World Bank Trading Across Borders will be used to examine Nigeria’s trade competitiveness drivers and obstacles carefully. We’ll critically assess the results using the theoretical frameworks we established before (Daraojimba et al., 2023: 200). Finally, we will examine Nigeria-India trade prospects and how trade diversification may affect their GVC involvement. Infrastructure will be essential to this inquiry, emphasizing its importance in influencing global commerce.
QUESTION 1: Examining the Drivers of Trade Competitiveness and the Shaping of Global Value Chains
Infrastructure is crucial to the construction and operation of Global Value Chains (GVCs), which are complex networks of industry and commerce. According to Gary Gereffi, John Humphrey, Fernando Amador, and Gary Sturgeon, GVCs entail complex cross-border cooperation to generate commodities and services (Elshaarawy and Ezzat, 2023: 230). Modern international commerce has been transformed by GVCs, which have changed product manufacturing and trading. From several viewpoints, GVCs include value creation. Gary Gereffi’s conception stresses lead companies and governance mechanisms in these chains. He believes GVCs are led by corporations that manage manufacturing, typically with subcontractors and vendors in multiple places. This hierarchical structure affects global production network dynamics and power distribution.
By introducing upgrading, John Humphrey expands our knowledge of GVCs. Upgrading skills and technology throughout the value chain helps nations move forward and become more competitive (Koroglu, 2023). This view shows how GVCs change over time and how nations may specialize. By measuring and analyzing GVCs, Fernando Amador and Gary Sturgeon helped conceptualize. GVCs emerged due to reduced travel, information, and communication costs, according to Amador. GVCs are possible due to cost reductions and technical advancements that have fragmented manufacturing processes across borders. Sturgeon’s model stresses GVCs’ interconnection and complexity, giving frameworks for analyzing production network phases and linkages.
GVCs emerged from numerous forces, similar to international commerce. Transportation, communication, and energy infrastructure are significant drivers. Robust infrastructure allows GVCs to transfer commodities and data across borders efficiently. This follows international trade trends that infrastructure is crucial to a nation’s competitiveness (Nasser, F. and Ouerghi, 2023: 2350018). Technological innovation has digitalized manufacturing and communication, making it easier to coordinate operations across distances. Less political and economic trade and capital barriers have also made the global economy more open and linked. These drivers show how international commerce and GVCs are linked.
Several indices and systems quantify the GVC effect and efficiency. WTO, UNCTAD, and World Bank publications evaluate nations’ GVC involvement. Indicators like the Enabling Trade Index assess infrastructure, administrative efficiency, and business ease. The Logistics Performance Index and World Bank Trading Across Borders report help examine how infrastructure and associated elements affect the country’s GVC integration. In conclusion, infrastructure shapes GVCs, which are vital to global commerce. Gereffi, Humphrey, Amador, and Sturgeon’s GVC conceptualizations provide several viewpoints on chain structure and dynamics (Nyagadza et al., 2022: 2014654). GVCs arise due to circumstances comparable to international commerce, highlighting their interconnectedness. Reputable organizations’ measurement methods help analyze nations’ GVC involvement, highlighting infrastructure and associated factors.
QUESTION 2: Analysis of Nigeria’s Trade Competitiveness
On the theoretical underpinnings of Question 1, this part analyzes Nigeria’s trade competitiveness using the Enabling Trade Index, Logistics Performance Index, and World Bank Trading Across Borders. Recalling point 6) in Question 1, which established these measures, guarantees essay cohesion (Oke and Nair, 2023: 30). This study examines technology and connectivity, which are crucial to infrastructure and trade efficiency. We use the WEF 2016 rankings, which placed India at 102nd and Nigeria at 127th. India rose to 38th in the 2023 Logistics Performance Index, while Nigeria rose to 88th. The following study will examine India’s and Nigeria’s rise and their main drivers.
Critical Analysis
From 102nd to 38th in trade competitiveness rankings, India has transformed itself via proactive actions and comprehensive policy measures. A detailed review of India’s rise in the global rankings reveals its dynamics. India’s competitiveness has grown due to its aggressive use of technology. GST adoption and success signaled a paradigm change. A single tax system simplified internal trade operations and reduced redundancies. The “Digital India” effort accelerated technology breakthroughs, creating a digital environment that increased commerce, communication, and paperwork (Terán-Bustamante and Martínez-Velasco, 2023: 40). India developed robust infrastructure with technological advances. Transportation networks, logistical facilities, and connections were strategically invested to eliminate bottlenecks. These improvements lowered transit times and increased trade efficiency, making India an appealing location for international supply chains.
India’s rise is mainly due to trade liberalization policy improvements. They simplify customs processes, digitize documents, and improve border clearance, making commerce more frictionless. These changes have made India more trade-friendly, creating a business-friendly environment. A robust digital environment and improved connections are critical to India’s growth. Communication was quicker and more dependable because of online trading platforms and digital connections (UNCTAD, 2013). This decreased transaction costs and improved India’s integration into worldwide supply chains, making it a favored cross-border trading partner. Building capacities and skill development have prepared the Indian workforce for new technology. Human capital investment has boosted global efficiency and competitiveness.
Nigeria’s rise from 127th to 88th in the world’s trade competitive rankings is encouraging, but it faces ongoing hurdles. Nigeria’s trade dynamics may be understood by examining the causes of this progress. Nigeria’s technological limitations are substantial. In an age when digitalization boosts efficiency, the country’s sluggish adoption of sophisticated technology hinders trade process optimization. Nigeria needs to catch up in digital customs processes, electronic paperwork, and online commerce facilitation platforms, highlighting the technology divide. Infrastructure gaps in transportation, electricity, and logistics hinder Nigeria’s trade competitiveness. In contrast to India’s infrastructure upgrades, Nigeria’s infrastructure gaps slow commodities flow. Poor transport and energy supplies cause delays and higher prices, hurting Nigerian exports.
Bureaucratic hurdles in Nigeria’s commercial environment slow growth. Inefficiencies result from lengthy administrative procedures, excessive paperwork, and customs delays. Trade facilitation initiatives have been undertaken. However, bureaucratic impediments still impede the movement of goods and complicate transactions (WTO, 2016). In order to comprehend why Nigeria falls behind India despite growth, compare the elements that have improved India. India’s trading environment has improved due to its proactive commitment to the adoption of technology and digitization, such as the GST and “Digital India” campaign.
Technology investments have improved internal procedures, reduced redundancies, and made cross-border transactions easier, providing India with a competitive advantage (World Bank, 2016). India’s better standing is due to its infrastructural development, particularly transportation networks and logistical facilities. Strategic investments and regulatory measures have reduced bottlenecks, improving goods transportation. This contrasts with Nigeria’s infrastructural issues. Policy changes, especially trade liberalization, have propelled India. India’s competitiveness has improved due to simplified customs processes, digitized paperwork, and fast border clearance. In comparison, Nigeria still faces bureaucratic hurdles that impede trade.
Evaluation of Findings
Strategic interventions and transformational efforts helped India rise from 102nd to 38th in global trade competitiveness indexes. Nigeria improved from 127th to 88th. A detailed look at their advancements reveals the differences between the two countries. India’s prosperity stems from its proactive technology adoption and digitization. The GST and “Digital India” push has improved India’s commerce ecology (Zumbansen, 2023: 40). Comprehensive technological investments have improved internal procedures, minimized redundancies, and expedited cross-border transactions. The deliberate use of digital customs processes, electronic paperwork, as well as online trade facilitation systems has given India an advantage.
Logistics and infrastructural improvements have helped India’s standing. Strategic investments and regulatory measures have reduced bottlenecks, improving goods transportation. An integrated strategy regarding transport systems, logistics facilities, and connectivity has made India competitive in global commerce. India’s trade facilitation policy improvements have been crucial. India is more competitive due to simplified customs processes, digitalization of documents, and fast border clearance (Gereff et al., 2021: 15). These improvements have made business more accessible, easing product movement. Development of capacity and skill development support India’s growth. The Indian workforce can use modern technology, improving efficiency and competitiveness. Digital literacy and new technology skills have helped India increase its worldwide commerce.
Nigeria has made good progress, but its rank needs to catch up to India (38th) and requires strategic reforms. Technological adoption issues hamper Nigeria’s trade process efficiency. To narrow this gap, Nigeria needs to invest in digital infrastructure to facilitate trade technology integration (Humphrey and Michida, 2021: 20). Implementing digital customs processes, electronic paperwork, and online commercial facilitation platforms will boost efficiency and competitiveness. There needs to be more infrastructural investments in Nigeria to impede commodities mobility. Nigeria needs a comprehensive logistical and transportation infrastructure development plan to solve this inequality. Strategic investments in these sectors will improve domestic and international trade, boosting competitiveness.
Nigeria’s bureaucracy impedes trade. Nigeria needs bureaucratic-reduction initiatives to tackle this difficulty. Making commerce more favorable to businesses and efficient requires streamlining administrative processes, digitizing data, and assuring speedy customs clearance. Nigeria prioritizes skills and institutional development (Althouse et al., 2023: 106308). Developing a competent workforce that can use technology to facilitate commerce is crucial. This includes focused measures to improve digital literacy, train on new technologies, and strengthen institutional capacity to negotiate global commerce. India and Nigeria’s global trade competitiveness demonstrates the transformational impact of planned expenditures and comprehensive changes. Nigeria must prioritize technology adoption, transportation and infrastructure development, legislative changes, and capacity building to catch up to India. Nigeria may become more competitive and a dynamic actor in global value chains by tackling these critical areas.
QUESTION 3: Assessing Trade Opportunities between Nigeria and India for Enhanced Participation in Global Value Chains (GVCs)
Nigeria and India have prospective synergies in the ICT industry when considering diversification of trade and exports to affect their involvement in Global Value Chains (GVCs). The vast markets of India and Nigeria provide opportunities for partnership. Despite individual market access hurdles, collaboration might build new markets following bilateral trade norms. This strategic collaboration would use both countries’ large customer bases to boost economic development via cooperative projects (Daraojimba et al., 2023: 200). The more advanced ICT integration in India, as opposed to Nigeria, is critical to this research. India’s robust ICT infrastructure in border leadership, transport accessibility, and its Logistics Performance Index (LPI) offers partnership opportunities. Indian knowledge in these areas may help Nigeria ease commerce. Nigeria’s ICT infrastructure might be upgraded collaboratively to enhance border operations, transport, and logistics.
A manufacturing-focused ICT strategy might be a win-win. Nigeria’s rising need for hardware, software, and communications devices matches India’s manufacturing capability. Collaboration in ICT manufacturing might enable India to access into Nigeria’s growing market while helping Nigeria build an ICT manufacturing ecosystem (Ajide, 2023). According to comparative advantage, India’s technology skills may create value. India contributes its ICT expertise to Nigeria via strategic technology transfer projects. Such efforts will boost local capacity and create a tech-savvy workforce in Nigeria.
National policy rapprochement via agreements on trade and investment is needed to realize these trade prospects. Tariff obstacles, regulatory cooperation, and facilitating investment may be addressed via bilateral agreements. These agreements would improve trade competitiveness and enable both countries to join Global Value Chains. Trade prospects between Nigeria and India, particularly in ICT, provide reciprocal development (Gereffi, G. and Sturgeon, 2013: 350). By strategically using India’s ICT expertise, resolving market access issues, and encouraging joint ICT production, both countries may benefit. Comparative advantage, technological transfer, and diplomatic reconciliation provide the groundwork for realizing potential and navigating global value chains.
In conclusion, the environment for international commerce is changing quickly, and in order to take advantage of possibilities and overcome obstacles, countries must strategically adapt. A country’s competitiveness is greatly influenced by its policy frameworks, infrastructure, and technical developments. Nigeria and India may establish themselves as active players in the constantly shifting dynamics of global chains of value by tackling their unique problems and using their advantages. By working together, making intelligent investments, and changing their policies, both countries can open up new economic opportunities and add to the story of a dynamic and linked global trade ecosystem.
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