Trade Horizons’ Market Entry Blog

In an increasingly interconnected world, the dynamics of global trade are constantly evolving. McKinsey's insightful article, "Geopolitics and the geometry of global trade," provides a comprehensive analysis of these changes. The article explores how geopolitical distance impacts global goods trade, with a particular focus on globally concentrated products. It highlights the shifting trade patterns of major economies like China, Germany, the UK, and the US, and emerging economies like those in the Association of Southeast Asian Nations, Brazil, and India. The article also delves into the surge of greenfield investment flowing to developing economies, particularly in Africa and India. With a forward-looking perspective, it discusses the future trade-offs and strategies businesses need to adopt to navigate this uncertain landscape. The article is a must-read for anyone seeking to understand the complex interplay between geopolitics and global trade.

In the dynamic landscape of global economics, Nigeria is emerging as a promising pole of growth. With its rich natural resources and low cost of labour, the country has become the third host economy for Foreign Direct Investment (FDI) in Africa, behind Egypt and Ethiopia. In 2021, FDI flows to Nigeria totalled USD 4.8 billion, more than doubling from the previous year. Despite the challenges of widespread corruption, political instability, and infrastructural issues, Nigeria has shown a remarkable resilience and adaptability. The recent efforts by the Nigerian government to merge trade, industry, and investment under the ambit of the Federal Ministry of Industry, Trade and Investment reflect a strategic move to improve its trading and investment environment. This initiative, coupled with the country's intention to diversify its economy away from oil by building a competitive manufacturing sector, has piqued the interest of foreign investors.

South Korea, a nation known for its technological prowess, has drawn a record amount of foreign direct investment (FDI) in 2023. This surge in investment is a testament to the growing confidence in South Korea's technology sector, which has become more deeply embedded in global supply chains since the pandemic. In 2023, about $18.8 billion of funds flowed into South Korea, marking a 3.4% increase from the previous year. The electronics sector accounted for $3 billion of the total investment. This sector is underpinned by two major pillars: semiconductors and rechargeable batteries.