By Damilola Aina

Every thriving trading nation possesses one invisible competitive advantage that cannot be measured by tariffs, ports, customs procedures, exchange rates or infrastructure; the traditional language of trade policy. It falters when peace gives way to conflict and trust between nations begins to erode. Without trust between nations, even the finest ports can become empty, the best trade agreements can lose meaning, and the most ambitious economic partnerships can unravel. 

Peace is the invisible infrastructure upon which every successful trading nation is built. 

The latest diplomatic tensions between Nigeria and South Africa provide a clear example. Reports of the deportation of Nigerians and concerns over the treatment of African migrants have reignited debates about xenophobia, regional integration and investor confidence.

The Nigerian government recently completed a voluntary repatriation of 1,490 citizens from South Africa in July following a wave of anti-immigration protests and xenophobic tensions. The evacuation occurred in seven batches and officially ended on July 15, with evacuees flown via Air Peace Limited to the Murtala Muhammed International Airport in Lagos.

While 1,000 Ghanaians were repatriated from South Africa after anti-immigrant groups issued a so-called deadline of June 30 for undocumented migrants to lea ve the country. Although governments have continued to engage diplomatically, public sentiment has become increasingly sceptical. Across business circles, opinions are emerging on whether South Africa remains a welcoming destination for entrepreneurs and investors from Nigeria and other African countries.

Whether justified or not, perception matters in investment. Investors do not respond only to facts; they respond to how a country, market or institution is perceived. The same reality played out, in a lighter but telling way, during the just-concluded 2026 FIFA World Cup, where many Africans openly prayed, wished and probably fasted for the downfall of South Africa’s Bafana Bafana. The team somehow survived the continental curse until the round of 16. 

If football could generate such widespread sentiment against a fellow African country, it is not difficult to imagine how deeper diplomatic tensions can shape perceptions of where people want to travel, trade, invest or do business.

Capital naturally seeks certainty. Investors prefer countries where people, goods and services can move freely without fear of discrimination, violence or political hostility. Once trust begins to erode, investment decisions change, business expansion slows, and cross-border partnerships become more difficult.

This is particularly troubling for Africa considering already established challenges. The African Continental Free Trade Area was established to create the world’s largest free trade area by number of participating countries. But free trade cannot exist where Africans fear moving across African borders. Trade is ultimately conducted by people.

If entrepreneurs fear harassment, professionals worry about arbitrary deportation, or skilled workers feel unwelcome, the objectives of AfCFTA become significantly harder to achieve. Free movement of goods cannot be sustained without reasonable confidence in the free and secure movement of people. Multiple visa requirements remain an issue. Migration should therefore not be viewed solely as an immigration challenge. It is also a trade issue.

Peace is essential for attracting investment because investors prefer stable environments where businesses can operate without disruption. Countries such as Rwanda have demonstrated how improved security and political stability can boost investor confidence and economic growth. 

Peace also supports trade and industrial development by ensuring the smooth movement of goods, services and people. Conflict increases transportation costs, disrupts supply chains and discourages business expansion. Mauritius, for instance, has leveraged political stability to build a strong tourism and services economy. Nigeria and South Africa stand to benefit similarly from a more secure environment that promotes commerce and regional trade. Nigeria’s importation of goods from South Africa rose by 23.83 per cent to N155.26 billion in the first quarter of 2026, but these numbers could take a hit by the second quarter.

Most importantly, peace expands economic freedom by allowing people to work, invest and innovate without fear. Botswana’s experience shows how stability can support sustained growth and rising living standards. For Nigeria and South Africa, lasting peace would enable citizens and businesses to fully harness economic opportunities, making prosperity more attainable and sustainable.

Conversely, conflict behaves like an invisible tax on every economic activity. Businesses pay more for insurance. Banks become more cautious. Shipping companies increase freight charges. Manufacturers face higher input costs. Consumers ultimately bear the burden through rising prices.

The lesson is clear. This explains why roads, ports, rail lines and industrial parks, however critical, cannot deliver their full economic value in an environment of persistent insecurity or strained diplomatic relations. Sustainable trade depends not only on physical infrastructure but also on a stable and peaceful environment that gives businesses the confidence to invest and move goods across borders.

Africa’s greatest comparative advantage may no longer be its natural resources or youthful population. It may be its ability to maintain peaceful regional relations that allow commerce to flourish. This requires more than political rhetoric.

Achieving this demands more than diplomatic rhetoric. Governments must protect the rights of migrants, strengthen bilateral and regional diplomacy, resolve disputes through dialogue and uphold the rule of law. Regional bodies such as the African Union and ECOWAS must also act swiftly whenever tensions threaten cross-border commerce or the movement of people. Xenophobia, discrimination and arbitrary expulsions do more than violate human dignity; they weaken investor confidence, disrupt regional value chains and undermine Africa’s long-term ambition of building an integrated continental market under the African Continental Free Trade Area.

The same philosophy should guide global affairs. Military confrontation should remain the last resort because modern wars are no longer confined to battlefields. They disrupt shipping lanes, distort commodity markets, interrupt supply chains and deepen inflation across continents.

As Economist Eamonn Butler reminds us in his book, Introduction to Trade & Globalisation, trade thrives through voluntary cooperation rather than coercion. Markets flourish when trust replaces hostility and negotiation replaces confrontation. For Africa, this lesson is especially important. The continent cannot fully realise the promise of AfCFTA if political tensions continue to overshadow economic cooperation. Likewise, global prosperity will remain vulnerable as long as strategic trade routes become theatres of geopolitical conflict.

Peace is therefore not simply a moral virtue. It is a productive capital. It is economic infrastructure.

It is perhaps the most valuable investment any nation can make. Without peace, there can be commerce.

But there cannot be free, resilient and sustainable trade. Before goods can cross borders, nations must first be willing to live with one another.

Aina is a 2026 Free Trade Fellow at the Ominira Initiative. He can be reached via” X @AinaDhamires.