HISTORY OF COMMERCE IN NIGERIA
In the olden days, people engaged in subsistence production. This means they were producing goods for themselves and their families. Later they started interacting with one another because it was difficult for them to meet all their daily requirements. The system of exchanging goods for goods called trade by barter then came into existence. This became apparent in order to meet their numerous wants. This is the genesis of exchange and perhaps the beginning of commercial activities the world over. Trading activities were, however, limited to internal trade only.
The first form of foreign trade in Nigeria was the trans-sahara trade in which camels were used as means of transportation.
The development of caravan routes across the desert linked Nigeria with the North African traders. The Arab merchants brought goods like salt, cowries, copper, cloth, books, etc which were exchanged for kolanuts, slaves, gold, hides, etc. Important towns like Kano, Bornu, Zaria, Katsina played crucial roles during that period.
Afterwards, another contact was made with the Europeans and that actually boosted commercial activities in Nigeria. This started in the fifteenth century when the missionaries came to Africa. The European traders brought weapons, books, cloths, etc and exchanged them for slaves and palm oil. The initial commercial towns that served as important trading routes to the sea were Badagry, Bonny, Opobo and Calabar. King Jaja of Opobo played a great role in the development of commerce in Nigeria.
After the abolition of slave trade by the British government, the first breakthrough in commercial activities in Nigeria was the establishment of United African Company (UAC) and Royal Niger Company. With the introduction of colonial rule, law and order was instituted and by 1960s, Nigeria had become a force to be reckoned with in the export of palm oil, cocoa, groundnut and later crude oil.
Also, during the 1960s, the exploration of crude oil brought businessmen from all over the world to Nigeria. That process changed the face of commercial activities in Nigeria. Huge revenue was generated to develop the infrastructural facilities, e.g. communication system, roads, flyovers, railways, airports, modern seaports, etc.
At present, commercial activities have reached a crucial stage in Nigeria with the introduction of sophisticated modern technology such as computer, e-mails, internet, etc to facilitate trade. Many commercial centres have developed in many cities and towns like Lagos, Ibadan, Kano, Port Harcourt, Warri, Kaduna, Ilorin among others.
FACTORS AFFECTING THE GROWTH OF COMMERCE IN WEST AFRICA
- Insufficient Capital: African countries lack sufficient capital to cope with the expanding nature of business activities; the level of capital formation is low.
- Political Instability: Constant change of government and war have hindered investment in West Africa. Foreign investors are afraid to invest in the sub-region.
- Low Savings: The culture of saving is very low in West Africa and Africa as a whole, hence there is no money for commercial transactions.
- Low Per Capita Income: Per capita income is very low. Majority of people in this region are living below the poverty line. The low level of income leads to low purchasing power for the people.
- Lack of Adequate Commercial Facilities: The various aids to trade, such as banks, insurance, warehouses, tourism are not well developed and this has greatly hindered commerce.
- Predominance of Primary Production: Majority of people in this region are engaged in primary agricultural production which does not favour speedy commercial growth.
- Poor Transport and Communication System: The region has very poor road network as well as poor communication systems. Most of the people have no access to telephone or internet.
- Low Levels of Education and Illiteracy: The high rate of illiteracy in this region has also affected the growth of commerce. Many of the people are not educated; they can neither read nor write and consequently cannot interact with foreign traders in a business transaction.
- Absence of Well Developed Market: Markets in West Africa are not well developed to accommodate large scale commercial activities.
FACTORS THAT ENCOURAGE THE GROWTH OF COMMERCE
- Emergence of Specialisation: Specialisation has brought about interdependence. People now depend on one another while they produce what they have comparative advantage in and this has led to mass production.
- Development of Means of Communication: The development of modern telecommunication system has eased and hastened contacts among people of different countries.
- Development of Financial Institutions: Financial institutions have developed their services rapidly over the years. They provide quick and efficient means of payment in foreign trade as well as making available credit for commercial activities.
- Development of Warehouse: Development of warehouses has enabled goods to be produced and kept ahead of demand. This helps in stabilising prices and provide protection from damage.
- Role of Advertising: Advertising has in fact facilitated commerce. Aggressive advertising has helped to create great awareness for many unknown goods. This helps to create and maintain demand for such products.
- Development of Means of Transportation: Improvement and development of the means of transporting goods and people from place to place has greatly affected commerce. Goods and people can now be moved to foreign countries via aeroplanes, ship or train.
- Development of Modern Forms of Production: The introduction of modern techniques in production has brought about the enjoyment of economies of large scale production.
- Government Participation: Government has also contributed to the growth of commerce by providing conducive and enabling environment for business operation and investment. They also provide loans and other incentives to merchants.
- Development of Insurance: The development of insurance which helped to reduce or spread risk involved in trade has also helped to promote the growth of commercial activities.
- Population Growth: Increase in world population has also increased commercial activities. Also changes in the consumption pattern of people have also facilitated growth in commerce.
- Emergence of Scientific Method of Grading: Through scientific grading and research, the problem of buying and selling has been reduced.