Unlocking trade competitiveness through education

Human capital accounts for nearly two-thirds of global wealth, says the 2025  World Bank report. Across advanced economies, the relationship between education, skills, and trade competitiveness is both visible and measurable. Organisation for Economic Co-operation and Development (OECD) shows that countries with higher levels of skills proficiency, particularly in literacy, numeracy, and problem-solving, tend to have more diversified exports and stronger participation in global value chains. In simple terms, skilled economies export more complex, higher-value goods and services.

A recurring pattern in global economic history is that countries which dominate international trade are not necessarily those with the most abundant natural resources, but those with the most skilled and educated workforce. This is evident in the performance of countries like Singapore and South Korea, whose exports reached approximately $514 billion and $683 billion respectively in 2022, despite limited natural resource endowments (World Bank; WTO). Empirical evidence further shows that a 1% increase in human capital can raise long-term economic output by 3–6%, underscoring the central role of education and skills in productivity and trade competitiveness (OECD). Similarly, the World Bank Human Capital Index indicates that countries investing in education and health achieve 2–3 times higher productivity levels than those with lower human capital. This reality continues to shape the dynamics of competitiveness in an increasingly globalised and technology-driven world.

Nigeria, despite being one of Africa’s largest economies with its export profile, remains by crude oil, which accounts for over 80% of export earnings. Non-oil exports, particularly in manufacturing and services, remain underdeveloped. This imbalance reflects not just policy gaps but also a deeper issue: the limited availability of industry-relevant skills needed to drive diversification. (Word Bank,2023)

On a broader scale, the African Continental Free Trade Area (AfCFTA) presents both an opportunity and a challenge. While the agreement aims to boost intra-African trade, its success depends largely on the capacity of member states to produce competitive goods and services. Without a skilled workforce, the benefits of such trade agreements may remain limited, as countries struggle to meet demand or compete effectively within the continental market.

The conversation around education, however, goes beyond access to schooling. While formal education provides the foundational knowledge required for economic participation, it is the acquisition of relevant, practical skills that determines a country’s ability to compete in global markets. The distinction between education and skills has become increasingly important, particularly in the context of evolving trade patterns driven by digital transformation and industrial innovation. Learning soft skills is a critical way for citizens to remain relevant in this age of Artificial Intelligence. These skills help individuals stay competitive and adaptable in a rapidly changing world.

In addition, developing soft skills contributes to improving Nigeria’s trade competitiveness. When citizens are equipped with strong interpersonal and cognitive abilities, they are better positioned to add value in both local and global markets. The ability to think critically is especially important in navigating complex global economic systems. Effective communication also plays a key role in building strong professional and business relationships.

Furthermore, adaptability enables individuals to respond quickly to changing environments and emerging technologies. Together, these skills strengthen both personal employability and national economic performance. As businesses expand across borders, these skills facilitate collaboration, negotiation, and efficient problem-solving, all of which are vital for sustaining trade relationships.

OECD research indicates that countries with strong vocational training systems, such as Germany and Switzerland, tend to have more competitive manufacturing sectors and lower youth unemployment rates. These systems provide practical, job-ready skills that directly feed into industrial productivity and export capacity. The rise of knowledge-driven industries further underscores the importance of skills in shaping trade outcomes. Sectors such as information technology, advanced manufacturing, and the creative economy are redefining the structure of global trade. Participation in these sectors requires specialised knowledge and continuous skill development, making traditional education models insufficient in isolation. 

The impact of rapid technological advancement cannot be overlooked in this discourse. Automation, artificial intelligence, and digital platforms are transforming the nature of work and trade. As a result, the demand for new skills continues to rise, while existing ones become obsolete at an unprecedented rate. This development has made lifelong learning an essential element of any competitive economy.

For countries like Nigeria with a youthful population and growing interest in sectors such as technology and the creative industry, there is a unique opportunity to position the country as a key player in global trade. However, this potential can only be realised through deliberate investment in education systems that prioritise skill acquisition and practical application, through stronger collaboration between educational institutions and industry stakeholders. Universities, polytechnics, and technical colleges must work closely with employers, manufacturers, and trade associations to co-design curricula that reflect market demands and ensure that graduates are better prepared to meet the needs of the economy. 

In addition, policies that support continuous learning and skill development will enhance workforce adaptability and resilience. The role of the government in this process is crucial.  Key institutions such as the Ministry of Education, the Ministry of Industry, Trade and Investment, and relevant technical and vocational education boards must drive strategic investments in education, particularly in science, technology, engineering, and vocational training, to create a pipeline of skilled workers capable of driving industrial growth. At the same time, the private sector must play an active role in training and capacity building to bridge existing skill gaps.

Another critical solution lies in strengthening data-driven labour market intelligence systems. A government agency such as the National Bureau of Statistics must regularly track and publish data on emerging skill demands across sectors. This will enable policymakers, educational institutions, and training centres to make informed decisions about curriculum design and workforce development. Without reliable data on what skills are needed, investments in education risk becoming misaligned with market realities. 

Ultimately, trade competitiveness is the result of sustained investment in human capital and a clear understanding of the relationship between education and economic performance(World Economic forum). Countries that recognise this connection and act on it are better positioned to thrive in the global economy. Without a skilled workforce, economic potential remains untapped, and opportunities for growth are lost. Conversely, with the right combination of education and skills, countries can transform their economies, enhance their trade capacity, and secure a more competitive position on the global stage.

Adeniran Abdbasit Adeyemi is a 2026 free trade fellow at the Ominira Initiative for Economic Advancement.