1.1 Introduction, Rationale and the Context
In an era of big data, where every move is seemingly captured and recorded, traditional means of collecting data for official measures of the economyâfrom surveys to in-person price checksâappear increasingly outdated. Additionally, as the global economy changes with the spread of online shopping, âfreeâ internet sites and the gig economy, traditional methods of measurement may not adequately capture economic activity and variations in living standards. Privately collected big data has the potential to supplement or, in some cases, even supplant standard government indicators used to accurately capture changes in prices, quantities and quality. Further, harnessing the strengths of data sciences, AI and related financial instruments will generate inclusive development via improved efficiency and equity. However, difficulties relating to interpretation and access remain significant barriers to properly utilizing such data.
A strikingly emerging challenge is that the regulatory environment for digital trade is increasingly being tightened, particularly with regard to measures affecting data movement, infrastructure and connectivity (OECD 2019a). The Organisation for Economic Co-operation and Development (OECD) created a Digital Services Trade Restrictiveness Index (DSTRI), which identifies, catalogues and quantifies cross-cutting barriers that affect trade in digitally enabled services across 44 countries, covering the period from 2014 to 2018 with data available for every year (OECD 2019b). In other words, this requires governments to continually update data-related regulations and increasingly transfer data across borders or requiring that data be stored locally.
According to the Social Sciences and Humanities Research Council (SSHRC) of Canada, eight innovative technologies that are transforming and will continue to transform the global business infrastructure landscape in the next decades are artificial intelligence (AI), data analytics, sensors, blockchain, robotics, telepresence, 3D printing and synthetic biology. This will result immediately in unbundling traditional jobs into discrete tasks from an increasingly global labour pool, rising digitization of value chain eliminated the middlemen or human intermediaries, as well as reduction in transaction costs (shift from physical retail to online shopping). Further, the Horizon Canada notes that eight digital technologies which will combine to transform the global economy are:
- The Internet of Things will collect vast amounts of data and brings it to bear on the physical world.
- Artificial Intelligence (AI) and automated cognitive tasks will introduce new economic actors.
- Robotics will perform physical labour and provide an embodied platform for AI.
- Advanced telepresence will allow us to project ourselves and our expertise anywhere in the world that is connected to networks.
- Virtual reality will offer immersive non-physical worlds, while mixed reality will combine physical and virtual worlds, creating a third space distinct from both.
- Advanced materials are enabling the production of micro and nanoscale devices that can bring digitization to many new areas of low power.
- Decentralization production technologies such as 3D printing could use locally available inputs, including new biomaterials, to manufacture countless products on demand for local markets.
- Blockchain technologies create unique, non-copyable digital assets. This enables secure, low-cost transactions between parties who do not know each other. Further, AI and blockchain will replace human intermediaries in the sense that as they learn from data in the digital economy, AIs take over many roles currently played by humans. Blockchain reduces demand for trusted middle players in transactions. Depending on how fierce competition is and based on their data protection regimes, a small number of large firms could capture much of the information and profits in a networked economy.
Digital technologies are creating a global digital infrastructure in which traditional jobs are being unbundled into tasks and allocated to qualified, low-cost bidders across the planet, invariably eliminating middlemen and reducing costs. However, this has pervasive implications for income insecurity, inequality, mental health issues, ineffective nation state instruments, protectionism, etc.
In view of the digitalization of the global economy, rapid expansion of electronic commerce and the rising importance of digital trade in commodities, especially services, there is a need for an enhanced understanding of the functioning of e-commerce in Africa, and its implications for markets and competition. With Blockchain technology, artificial intelligence (AI) and similar innovations fast becoming an exciting new frontier for commerce in particular and socio-economic transformation in general, the future of digital trade seems promising in Africa. Five critical trends that describe the potential trajectory of the use of digital technology in Africa include inter alia: customer support in banking, inclusive development, financial services, insurance space and in product discovery in the e-tailing space. At present, e-commerce continues to be dominated by a few big playersâChinaâs Alibaba and JD.com and US firms Amazon, eBay and Walmart, where Amazon captures almost half of all virtual transactions in the United States. According to figures from Digital Commerce 360, e-commerce is growing year by year and in 2018, exceeded $2.86 trillion in sales around the globe, an 18% jump from 2017 figures.
In the face of increasing trade tariffs battles at the global level, trade facilitation remains a substantial area of policy research in which changes in markets, processes, products, firms and countries occur rapidly. Coincidently, in the last decade, e-commerce, technological advances and the rise of big data have changed the practice and landscape of trade facilitation. However due to its complexity and the need to improve the efficiency of trade flows, as well as their practical need to support decision making in trade operations, and the growing availability of data, more comprehensive approaches are becoming relevant in facilitating trade.
Based on this background, this book provides a good understanding of Nigeriaâs business opportunities, capacities, issues, challenges and lessons, with a special interest in sustainably enhancing the nationâs business ecosystem in the digital age. It examines the contributions of trade facilitation-related policies, programmes, tools and initiatives towards fostering trade and business opportunities in the face of increasing non-tariff barriers, asymmetries and opacity that highly characterizes Nigeriaâs business landscape. The publication also comprises a selection of well-research articles that has the potential to better illuminate trade facilitation challenges in Nigeria. It also purports to improve the quality of trade facilitation policy making processes and programming in Nigeria.
This book provides different perspectives and roadmaps on these issues and argues that the future of African trade will need to reinvent itself not only to address these challenges, but also to cope with mass individualization on the one hand while exploiting business applications of digitization on the other hand. However, one of the essential challenges will be to find a compromise between these two developmentsâin alignment with the known triple bottom line of sustainability.
Invariably, these discussions are of importance because they draw attention to the contribution that Science, Technology and Innovation (STI) discoveries make to the wider Nigerian economy. The analysis focuses on how improvements in the border processes result in a significant increase in observed trade and commerce. The issues examined in the book are both relevant and timely. As a matter of fact, the issues bordering on doing business in Nigeria, regional integration and trade facilitation have taken a front burner in both sustainable business development policy and intellectual discourse in Nigeria. Since the launch of the African Continental Free Trade Area (AfCFTA) in March 2018, as well as its signing in July 2019, there have been academic and political processes towards deploying digital trade as an potent tool for domesticating the continental initiative in Nigeria.
1.2 Bracing for the Future of Trade and Unlocking Its Opportunities
Data and innovation, being the lifeblood of digital trade, digitizing commerce is an effective and innovative approach to unlocking Nigeriaâs full potential, thereby making Nigerian companies more competitive in the deployment of e-solutions, in alignment with international standards. Though framework adaptation is still being discussed, it is relevant to note that existing WTO rules and agreements cover digital trade (OECD 2019a).
The digital economy is driving the patterns and expansion of commerce, employment and economic transformation. According to the OECD, digitalization has reduced cost of global trade, connected a greater number of businesses, diffused innovations, and facilitated the co-ordination of global value chains. This has resulted in new challenges for trade policy makers beyond managing digital disruption and ensuring that the opportunities and benefits from digital trade can be realized and shared more inclusively. More specifically, digital trade encompasses digitally enabled transactions in trade in goods and services that can be digitally or physically delivered such as software, e-books, data, hotel booking, etc. it also encompasses business-to-business transactions within global value chains, as well as transactions between consumers or businesses purchasing from each other through online platforms. The opportuni...