History of Commerce in Nigeria
Commerce SSS1 First Term
WEEK 2
History of Commerce in Nigeria
Performance Objectives
Student should be able to:
- Write about the historical background of Commerce in Nigeria.
- List factors affecting growth of commerce
- Describe the barter System
Content
The history of commerce in West Africa can be traced to the origin of man. There was a time when man pre-occupied himself with providing all the basic needs of life alone. He used the available resources in his environment and lived a subsistence life.
However, as the size of the family grew, their appetite and other needs of life became increasingly high.
It became difficult to continue to live at the subsistence level without the necessary assistance from others. So, man began to interact with other people, so as to benefit from them, through one form of exchange or another
It was certain that there was surplus production based on the natural resources available within a given environment. People who lived around the riverine areas went into fishing and so had surplus fish. This was also the case with farmers who occupied fertile land. They cultivated diverse crops and had surplus agricultural produce. In effect, each of them had surplus items to give out in exchange for other things. To some extent, they were all specialist producers who needed the services of other specialist producers.
The need for exchange became necessary and so goods were exchanged for other goods and services. This marked the beginning of trade by barter.
Therefore, before the coming of Europeans, trading activities had started in West Africa and in Nigeria. Trade by barter continued despite the inherent problems - such as the double coincidence of wants, the indivisible nature of some goods, etc. To reduce these problems, different articles of trade were used at various times in different places. Some villagers were able to identify other villages where they could exchange their products for the things that were needed by their households.
The exchange activities gave rise to different trading centres in towns and villages on different days. This later developed into markets that we have today. The trading activities were not restricted to Nigerians alone. Other countries across the Sahara Desert, North and Western Sudan, soon came to Nigeria through Lake Chad to Bornu, Kano and Sokoto, to exchange their products. They came with salt, cloth, copper, books, brass, vessels and firearms, in exchange for kolanuts, hides, gold and later slaves.
Such Europeans as the Portuguese and the Dutch also participated in trading activities from the 15th to the 16th century at various times. They came with iron bars, horse shoes, shaped copper, manillas, and cowries. They contributed to the introduction of money as a medium of exchange.
The first set of foreigners who came to Nigeria for trading activities came through the desert and by sea. That contributed to trading across the Sahara Desert into
Nigeria through Sokoto, Kano and sea-routes in coastal towns such as Lagos, Opobo, Calabar, Brass, Bonny, Jebba and Lokoja. These towns still exist today as trading centres.
FACTORS AFFECTING THE GROWTH OF COMMERCE IN NIGERIA
1. Insufficient Capital: African countries lack sufficient capital to cope with the expanding nature of business activities
2. Political Instability: Constant changes of government and war have hindered investment in West Africa. Foreign investors are afraid to invest in the sub-region.
3. Low Savings: The culture of saving is very low in Nigeria and West Africa as a whole, hence low money for commercial transactions.
4. Low Per Capita Income: Per capital income is very low and the low level of income lead to low purchasing power for the people.
5. Lack of Adequate Commercial Facilities: Ancillary to trade such as banks, insurance, warehouse, tourism are not well developed as this has greatly hindered commerce
6. Predominance of Primary Production: Majority of people in this Nigeria and West Africa engage in primary agricultural production which does not favour speedy commercial growth.
7. Poor Transport and Communication System: The road network in Nigeria is very poor as well as poor communication system
THE BARTER SYSTEM OR TRADE BY BARTER
This may be defined as a form of trading in which goods are exchanged directly for other goods without the use money as a medium of exchange. For example, if someone has garri and is in need of beans, he must locate somebody who has beans and is in need of garri.
Problems of Trade by Barter
1. Problems of double coincidence of wants: This involves looking for someone who is in need of what you have and at the same time has what you need. To do this amounts to a very serious problem.
2. No fixed rate of exchange: There is the problem of exchange rate determination between two products. Different rates of exchange have to be determined to cover every transaction before it can take place, e.g. how much of garri will exchange for beans.
3. Wastage of time and effort: Barter system leads to waste of time and energy because one has to search for somebody to exchange the goods with.
4. Problems of indivisibility: Many goods cannot be divided into small convenient units because they are heavy and indivisible so it does not encourage divisibility.
5. Problems created by bulkiness of some goods: The bulkiness of some goods to be exchanged makes it difficult to carry them about.
6. Absence of deferred payment: In trade by barter, there is no room for deferred payment. It requires immediate settlement.