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Part A

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Part A

Question 1

The competitiveness of an economy is evaluated by the exports it sells versus the imports

it purchases, based on value and volume. A competitive country exports more value than it

imports, which leads to favorable terms of trade. The drivers of competitiveness from a global

chain perspective are factors that increase the chances of a country exporting more commodities

than it exports. When the country exports more than it imports, it earns more monetary value,

strengthening its position on the global value chain. Least-developed countries (LCDs) have

limited technological advancement, which reduces their international trade competitiveness

(World Trade Organization, 2022, 123). Thus, the disadvantages reduce the less developed

countries’ competitiveness on the global value chain. From a global chain perspective, labor

productivity and economic policy are the other drivers of competitiveness. Countries with

advanced technology, exceptional economic policies, and optimal labor productivity create more

value and are at a great position on the global value chain.

Labor productivity is a major driver of competitiveness from a global chain’s perspective,

where a nation’s productivity significantly increases based on the quality of labor. Labor

productivity increases the chances of a country having a higher comparative advantage than its

peers. Labor productivity is an asset for a country because it guarantees value enhancement, vital

for sustainable economic growth (Erumban et al., 2019, 189). When a significant portion of the

population is actively engaged in productivity, the gross national product is likely to improve. A

large number of skilled employees in a country produces more utility, which is used to export

goods or services to other regions (Jambor et al., 2018, 16). Countries that have a large

proportion of their population being actively engaged in work are more productive than their
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counterparts that have a smaller labour force. Thus, the value chain favors countries with a more

productive population, where they export more commodities from their surplus. On the contrary,

countries with limited labor productivity import more utilities than they export, which reduces

their value on the global value chain. A country that imports more than it produces and exports

has an imbalance of trade, which works against its economy.

Economic policy is a significant driver of trade competitiveness and positively affects

countries with exceptional plans that positively affect their firms. Countries that implement

economic policies with certainty avoid shocks in economic factors, which is conducive to

productivity. On the contrary, organizations with uncertain policies that do not effectively protect

local firms suffer from compromised productivity (Caggiano et al., 2020, 23). When the

economic cycles are unpredictable, economies are less productive. However, the presence of

certain economic policies increases long-term productivity scheduling, which enhances the

chances of exporting more products. Investment and labor productivity are enhanced when sound

economic policies are implemented in any economy (Li et al., 2023, 498). The value chain favors

countries with better economic policies as they export more commodities than imports. Thus,

countries with a comparative and competitive advantage in producing and selling particular

commodities have exemplary economic policies that protect their interests.

Technology drives trade competitiveness because of the convenience of producing utility.

Countries whose firms have better technology benefit from more exports, which enables them to

benefit from favorable terms of trade. Adopting advanced technology enables countries to

produce more commodities with limited input (Sultanuzzaman et al., 2019, 2516). Moreover,

collaboration among various firms is optimized through technological advancement, which

enhances strategic partnerships. Global value chains favor countries with more advanced
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technologies because of the convenience and refinement of their products and services. Unlike

less developed nations, developed countries have better technology for their firms. The balance

of trade favors the developed nations because of the refinement of their commodities as some of

the best technologies support them. Thus, more value flows from the less developed nations to

the developed counterparts. Refined commodities are exported more than less refined goods and

services, which favors regions with advanced technology.

Technology, economic policies, and labor productivity are significant drivers of

competitiveness. Organizations in developed countries enjoy sound economic policies,

adequately trained employees, and the best technology. Consequently, more value is produced

among the organizations in the countries, which yields more exports. On the contrary, least-

developed countries have less technology adoption, poor economic policies, and low labor

productivity. Thus, the presence of adequate drivers of global competitiveness increases the

chances of countries benefiting from international trade. The World Trade Organization

suggests setting up measures to help the least-developed nations to optimize their productivity.

Question 2

Nigeria’s economy has numerous drivers and barriers to economic growth that need to be

addressed by stakeholders to achieve exceptional and sustainable results. The barriers and

barriers to economic growth have been documented in numerous industry reports. The major

drivers of economic growth in Nigeria include a significant deposit of natural resources mined

and used to generate adequate exports. Oil and gas is the major export from Nigeria, which is a

driver of favorable balance of payments. Increased technology adoption among young people is

another significant driver, where creativity and innovation are used to optimize utility among

domestic and international clients. However, there are numerous barriers to economic growth in
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Nigeria, like insecurity, limited diversity in the commodities produced, and poor infrastructure.

When the barriers are reduced and drivers optimized, there will be a high probability of

achieving better outcomes for the nation’s economic growth.

Nigeria’s economic environment has numerous elements that explain the level of

commercial activity and international trade competitiveness. Limited diversification is one of the

major characteristics of the Nigerian economy, where few sectors account for the national

productivity. 50% of the working population in Nigeria is employed in Agriculture, 15% in retail

and wholesale, manufacturing, public administration, and health and education account for 10%

of the workforce each (World Bank, 2017, 11). Oil and gas contribute the largest share of

national productivity. Agriculture is the second largest sector in the country’s productivity,

followed by manufacturing. Primary production is dominant in the economy, with limited

refinement, hence little competitiveness on the international trade stage. Nigeria’s economy has

experienced a decline in international trade competitiveness because of limited diversity and

other non-tariff barriers to international trade. Diversification of exports increases investments in

various sectors, which yields numerous secondary economic benefits (Nwosa et al., 2019, 501).

The figure below shows the relationship between agricultural produce and economic growth in

Nigeria. Agriculture contributes a significant proportion of the country’s economic growth,

which can yield more international trade opportunities when optimized.

Relationship Between Nigeria’s Agriculture and Economic Growth

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Source: (Osabohien et al., 2019, 4).

Multiple aspects are highlighted as Nigeria’s drivers of economic growth as they create

utility from various perspectives. Rich deposits of natural resources is one of the drivers of the

country’s trade competitiveness. Nigeria has natural resources like oil, which is valuable and

contributes to a significant portion of annual exports (World Bank, 2017, 21). Increasing

technology literacy among young people contributes to the country’s trade competitiveness. The

workforce can optimize technology skills or export labor to international markets, which is an

incentive to Nigeria’s growth. Moreover, a young and educated population is a source of trade

competitiveness as it significantly contributes to productivity through creativity and innovation

in various sectors. The large and growing population provided a market for commodities, which

enhanced economic activity and competitiveness.

Nigeria faced many barriers to its trade competitiveness that should be effectively

addressed. Underdeveloped infrastructure is one of the major non-tariff barriers to trade

competitiveness. Utilities cannot be transferred to various locations because of the poor

infrastructure in many regions (World Economic Forum, 2022, 24). For example, the country
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lacks an adequate electricity supply that should be used to run industries. Insecurity in many

parts of the country also reduces the country’s effectiveness in producing goods and delivering

satisfactory services (Adofu and Alhassan, 2018, 103). Local and international traders cannot

facilitate trade without adequate security assurance. Poor government policies also reduce the

country’s trade competitiveness. Corruption reduces the motivation to trade in the country, while

inadequate protection of intellectual property reduces the incentive for creativity and innovation.

An objective highlight of some major barriers and opportunities of economic growth in

Nigeria is critical for implementing strategies that will optimize economic growth. Nigeria is a

third world country and faces challenges experienced by many other least-developed countries.

Poor infrastructure in most regions and sectors reduces the quality of collaboration achieved in

various sectors. Lack of electricity to reliably power industries reduces local productivity and

curtails international competitiveness (Nkalo and Agwu, 2019, 29). Insecurity and limited

diversification of production also compromise the country’s economic growth. However, a rich

mineral deposit and a growing interest in technology among the young are vital drivers of

economic growth. Nigeria has an immense growth potential that can be achieved by optimizing

opportunities and minimizing the adverse effects of its barriers to economic growth.

Question 3

Nigeria and India are populous and have adequate resources whose value can be

improved for more demand internationally. However, the countries have a narrow scope of

product development and sales, compromising their trade balance. Manufacturing is an excellent

opportunity for countries where diversity and value enhancement can be achieved. The presence

of adequate raw materials in the countries guarantees a reliable supply of inputs to the production

processes, which will most likely yield exceptional value (Ohiomah et al., 2019, 413). Nigeria
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can export oil and gas to India while it imports pharmaceutical products. Bilateral trade relations

between the countries and value enhancement through a better manufacturing environment will

likely yield better economic outcomes. Broadening the base of exports through manufacturing

guarantees a better position on the global value chain, which significantly improves the country’s

economic environment.

Trade participation in the global value chain requires entities to refine the value they

deliver in various sectors. Nigeria and India are populous and can use that statistic to optimize

their productivity. Agriculture is one of the economic activities that can be used to improve the

countries’ participation in the global value chain. Value enhancement of agricultural products is

a core option that can be used to increase the chances of improving their economic activity

because of the demand and value of refined produce (Okunlola et al., 2019, 471) Optimizing the

information communication technology of young talented individuals is an additional option that

will yield exemplary results. Energy collaboration, where Nigeria will export more fuel to India

while India exports pharmaceuticals, is a strategic collaboration between the two countries.

Favorable trading partnerships can be created, which is desirable for the countries’ value chain.

Value enhancement through manufacturing is the best option for Nigeria and India to

achieve optimal results from collaboration with India. Refined petroleum, agricultural, and

pharmaceutical products are in demand on the international market. Thus, the manufacturing

sector needs to be optimized to increase diversification and value enhancement. Refined exports

fetch better prices and higher international demand, a combination that will sustainably

positively impact the global value chain (Osabohien et al., 2019, 6) Bilateral relations that will

facilitate better trading terms between Nigeria and India will enable the countries to optimize the

higher value of commodities that are produced and sold based on the diversified and refined
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exports. Workers’ wages will increase with the enhancement in manufacturing in Nigeria, hence

improving economic activity. The benefits will therefore have sustainable desirable benefits.

Favorable Wage Increment on Improved Manufacturing and Diversification

Developed countries have a common characteristic of significant investments in their

manufacturing sectors. However, least-developed countries are faced by the challenge of limited

investment in their manufacturing sectors. Nigeria and India face the same challenge of limited

manufacturing, which curtails the chances of diversifying the exports they contribute to the

global value chain. India and China have adequate agricultural produce and a large local market.

However, the countries import food from other countries because of their refinement. When the

manufacturing sector is improved to promote value addition and diversification, there will be a

high probability of selling commodities at a higher value. Refined commodities attract more

buyers on the international market and guarantee exceptional satisfaction (Okunlola et al., 2019,
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469). Value enhancement from manufacturing through value addition will significantly aid

economic growth for India and Nigeria.

Conclusion

Nigeria and India are notable for their dense population and low rate of development in

numerous sectors. The countries face significant challenges in becoming competitive on the

international market scene because of the immense structural setbacks they face. However,

collaboration based on strengthening investments in their manufacturing sector will improve the

value they provide to the global value chain. India and Nigeria have sufficient natural resources

whose value can be enhanced through manufacturing and yield a sustainable competitive

advantage. Bilateral relations between the countries can also be improved, where India will

export pharmaceutical products, while Nigeria exports oil and gas. The large population in each

country forms a reliable market for the commodities, which increases earnings from international

trade. Value optimization is another critical aspect that will improve the countries' global value

chain position.
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