Commercial Activities

Commercial Activities (Trade) In Nigeria Trade involves the exchange of goods and services through buying and selling within a country or between countries. When this occurs within a country, it is termed internal trade, and when it happens between countries, it is known as international trade.   Internal trade is influenced by factors such as […]

Commercial Activities (Trade) In Nigeria

Trade involves the exchange of goods and services through buying and selling within a country or between countries. When this occurs within a country, it is termed internal trade, and when it happens between countries, it is known as international trade.

 

Internal trade is influenced by factors such as variations in regional products, climate differences, fertile soil, a broad market, and the use of a common currency. On the other hand, international trade is categorized into import trade, where goods and services are purchased from another country, and export trade, where goods and services produced domestically are sold to other nations.

 

The significance of international trade lies in fostering cooperation between nations, providing access to new products, generating foreign exchange, creating employment opportunities, stimulating ancillary services, facilitating the exchange of ideas, encouraging the production of exportable goods, promoting industrial growth, enhancing living standards, and contributing to government revenue through import and export duties.

 

Several factors affect the volume of international trade between countries, including differences in natural resources, technology levels, import duties, and the prices of goods. Colonial ties, foreign exchange needs, political considerations, comparative cost advantages, and other factors also play a role.

 

For Nigeria, high volumes of trade with developed countries like Britain, the USA, and Japan are driven by factors such as dissimilar products, advanced technology, high savings levels, colonial ties, differences in import duties and prices, a preference for imported goods, and the absence of trade unions. To improve trade between Nigeria and other African countries, measures such as encouraging specialization, forming an African Economic Community, technological advancements, and infrastructure development are suggested.

 

However, several challenges plague international trade, including inadequate capital, the export of raw materials, colonial history, unfavorable trade balances, low currency value, high transportation costs, port congestions, and government policies. Solutions involve political stability, peace agreements, tariff reductions, effective trade policies, trained port personnel, financial support, and processing facilities for raw materials.

 

Remedies for an unfavorable balance of trade include import restrictions, tax relief for young industries, bilateral trade agreements, exporting semi-finished goods, creating export processing zones, granting loans, and manufacturing import substitution goods.

 

Major ocean routes, such as the North Atlantic, Panama Canal, Trans-Pacific, South African or Cape Route, South Atlantic Route, and Mediterranean-Asiatic route, play a crucial role in facilitating international trade through sea navigation.

 

Nigeria’s main trading partners include Western European countries (Britain, Germany, France, Italy, etc.) and North and South American nations (USA, Canada, Brazil, etc.), with sea routes like the North Atlantic and South Atlantic facilitating the exchange of goods between Nigeria and these regions.

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