Global growth slows, but Nigeria and other global south economies can still shape the new trade order — UNCTAD

Omeiza Bilal

The global economy is slowing again, but trade is refusing to collapse. That is the central message of the United Nations Conference on Trade and Development (UNCTAD) Trade and Development Report 2026: The Geoeconomics of Development, released in Geneva on October 9, 2026.

UNCTAD projects global economic growth at 2.6 per cent in 2026, down from 2.9 per cent in 2025. At the same time, global trade in goods and services is expected to expand by about four per cent in real terms, after reaching a record 35 trillion dollars in 2025.

For developing economies, however, the outlook is less reassuring. Their growth is projected to fall to four per cent this year, from 4.7 per cent in 2025, while energy costs, financial instability and shrinking development assistance continue to squeeze governments and households.

A new economic order

The report argues that the world has entered an era of “geoeconomics,” in which trade, investment and technology are no longer driven only by efficiency and profit. Governments increasingly use tariffs, export controls, subsidies, investment screening and technology restrictions to protect industries they consider vital to economic and national security, including semiconductors, artificial intelligence infrastructure and clean-energy technologies.

This shift is redrawing the global trade map. UNCTAD notes that trade between China and the United States has fallen by more than 20 per cent since 2024, while East Asia has expanded commercial links with both China and North America.

For developing countries, the consequences are mixed. New investment corridors and shifting supply chains could create opportunities for countries able to offer infrastructure, skilled labour, stable policies and regional market access. But the report warns that many poorer economies risk remaining suppliers of raw materials while others capture the value from processing, technology and high-end services.

Asia leads, Africa lags

Asia remains the engine of the global economy. The region is expected to contribute 59 per cent of global growth in 2026, with India projected to grow by 7.3 per cent, China by 4.5 per cent and Indonesia by 5.2 per cent. Other strong performers include Vietnam at 7.8 per cent and Uzbekistan at 7.9 per cent.

By contrast, UNCTAD says income convergence between most developing countries and advanced economies has stalled since the mid-2010s. Africa’s challenge is particularly stark: although the continent supplies critical minerals for the global energy and digital transition, it captures only a small share of the value in global green supply chains.

Artificial intelligence illustrates the imbalance. AI-related products are now a major driver of merchandise trade, but the technology, capital and skills needed to compete remain concentrated among a small group of countries and firms. UNCTAD warns that developing economies could end up exporting minerals and importing expensive technology, while capturing little value at home.

Opportunities for Nigeria

The report does not present a wholly pessimistic picture. It identifies rising Global South economies—including Brazil, India, Indonesia, Nigeria, South Africa, Saudi Arabia and Turkey—as actors capable of shaping a more balanced global economy through sectoral strategies, trade diversification and regional cooperation.

For Nigeria, the findings reinforce the case for moving beyond primary commodity exports. Expanding value addition in agriculture, solid minerals, energy, digital services and manufacturing could help the country benefit from changing supply chains rather than merely supplying inputs to them.

Africa’s growing internal trade also offers room for progress. UNCTAD highlights the expansion of trade within Africa and between Africa and Europe, alongside a continental payment system linking 42 currencies, which reduces dependence on distant financial centres.

Policy choices matter

UNCTAD urges developing countries to invest deliberately in productive capacity, digital infrastructure, skills, clean energy and regional markets. It also calls for stronger participation by developing countries in international rule-making, especially on digital trade and artificial intelligence.

The report’s warning is clear: globalisation is not disappearing, but its rules are being rewritten.

Countries that build industries, deepen regional ties and invest in their people may still grow. Those that do not risk being locked into the lower end of a new, more strategic global economy.