Exploring the Impact of Global Economic Sanctions on Nigeria’s International Trade
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Background of the Study :
Global economic sanctions are powerful policy tools that can significantly disrupt international trade dynamics. Although Nigeria is not typically a target of broad sanctions regimes, it is indirectly affected by sanctions imposed on major trading partners and global economic shifts. These sanctions can lead to a reordering of trade relationships, shifts in currency flows, and changes in investment patterns that influence Nigeria’s international trade environment (Adebisi, 2023). As sanctions alter the availability of goods, modify competitive landscapes, and affect global supply chains, Nigerian importers and exporters must navigate an increasingly complex and uncertain trading climate.
The repercussions of these sanctions are multifaceted. On one hand, restrictions imposed on partner countries can reduce competition in certain sectors, potentially benefiting Nigerian exporters. On the other hand, the disruption of global supply chains and the imposition of secondary sanctions can create obstacles that diminish market access and increase transaction costs (Olaoye, 2024). Moreover, the uncertainty generated by sanctions can lead to heightened risk premiums, affecting investor confidence and influencing the decision‐making process within both private and public sectors. The ripple effects of these measures are evident in fluctuations in commodity prices, exchange rate volatility, and shifts in global investment patterns—all of which have direct implications for Nigeria’s international trade (Umar, 2025).
This study aims to explore the complex impact of global economic sanctions on Nigeria’s trade flows. By integrating quantitative trade data with qualitative analyses of policy responses, the research will examine how sanctions on key trading partners have reshaped Nigeria’s export and import patterns. Particular attention will be given to how industries such as energy, agriculture, and manufacturing adjust to the altered global landscape. The study also investigates the role of government policies in mitigating adverse effects and leveraging any potential opportunities arising from these disruptions. Ultimately, the research seeks to provide a nuanced understanding of how external political and economic pressures influence Nigeria’s trade performance in an era of increased geopolitical tensions.
Statement of the Problem :
Global economic sanctions, though not directly aimed at Nigeria, have indirectly disrupted its international trade by altering the competitive environment and supply chain dynamics. Nigerian businesses have encountered challenges such as reduced market access, increased transaction costs, and volatility in commodity prices resulting from sanctions imposed on key global players. These disruptions have created an environment of uncertainty, affecting both exporters and importers who rely on stable international markets. The inconsistent application of sanctions across different regions further complicates Nigeria’s ability to adjust its trade strategies effectively (Chukwu, 2024).
Another issue is the limited capacity of Nigerian policymakers to cushion the economy from the negative spillovers of global sanctions. The absence of targeted mitigation measures and strategic trade diversification plans has exacerbated the vulnerability of certain sectors, particularly those dependent on imported inputs. This problem is compounded by fluctuating exchange rates and the attendant risks, which diminish the overall resilience of the trade sector. The study, therefore, aims to identify the channels through which global sanctions impact Nigeria’s trade, assess the severity of these impacts, and explore policy measures that can help alleviate the adverse effects. Addressing these challenges is critical for ensuring that Nigeria’s trade framework remains robust in the face of external geopolitical pressures (Okeke, 2023).
Objectives of the Study:
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To examine the indirect effects of global economic sanctions on Nigeria’s trade flows.
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To identify the sectors most affected by sanctions‐induced disruptions.
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To propose policy measures to mitigate the adverse impacts on Nigeria’s international trade.
Research Questions:
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How do global economic sanctions indirectly affect Nigeria’s import and export activities?
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Which sectors are most vulnerable to sanctions‐induced trade disruptions?
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What policy interventions can mitigate the negative effects of global sanctions on trade?
Research Hypotheses:
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Global economic sanctions have a significant indirect impact on Nigeria’s trade balance.
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Sectors with higher import dependency are more adversely affected by sanctions.
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Strategic policy interventions can reduce the negative spillover effects of sanctions.
Scope and Limitations of the Study:
This study focuses on Nigeria’s international trade from 2015 to 2024, examining the indirect effects of sanctions on major trade sectors. Limitations include reliance on secondary data and the challenge of isolating sanction effects from other global economic variables.
Definitions of Terms:
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Global Economic Sanctions: Economic penalties imposed by one or more countries to influence the behavior of a target country.
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Trade Flows: The volume and value of imports and exports between countries.
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Secondary Sanctions: Indirect sanctions imposed on third parties doing business with a sanctioned entity.
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