NIGERIA’S TRADE AND COMMERCE

Trade is the selling and buying of goods and services between areas and peoples. Trade can be local, interregional or international. Nigeria is involved in all these types of trade. The term commerce” is used to cover all forms of transactions in the exchange of goods and services.

Local and interregional trades together constitute the internal trade of a country. International trade is that between a country and other countries; it covers greater distances when compared with internal trade. International trade involves both import and export of goods and services.

 

Nigeria’s Internal Trade

Nigeria spreads across several ecological zones, and each zone produces different products. This zonation forms the basis of the internal trade in the country. Internal trade in Nigeria is heavily dominated by trade in primary products.

For example, yams from Benue and Nassarawa state are taken to Lagos and other southern cities for sale; Gari from Edo and Delta States is taken to Ibadan, Lagos, Sokoto, Kaduna etc.; groundnuts produced in Kano are taken to Lagos, Ibadan, Enugu, Port Harcourt etc.; fish from Lake Chad is taken to Onitsha, Lagos and other cities in southern Nigeria; rice from Sokoto and Lafiagi-Patigi in Kwara States is taken to all parts of the country; tomatoes produced in northern parts of Nigeria are moved to the southern parts of the country; kola nuts from Shagamu area are moved to the northern states of the country where there is a large market for them; palm oil from Edo State and south eastern states of Nigeria (Enugu, Imo and Abia) is sent to northern Nigeria for sale.

However, trade in locally manufactured and imported goods is growing particularly in the large urban centres. Manufactured goods traded include:

1. Cement from Ewekoro, Nkalagu, Ukpila, Ashaka, and Sokoto, which are sent to other parts of the country;
2. Textile materials produced in Kaduna, Kano, Aba, and Lagos, which are sent to all parts of the country;
3. Plastic products produced in Ibadan, Lagos, and Kano are moved to other parts of the country;
4. Motor vehicles assembled in Enugu, Lagos and Kaduna are traded nationwide. Other commodities traded nationwide are consumer products including stationery, confectioneries, beverages, clothing, electrical and electronic appliances, building materials, chinaware and cutlery, and others. Many of these are produced in the major industrial centres such as, Lagos, Aba, Onitsha, Kano, Jos, Otta, and Port Harcourt but quite a substantial proportion is imported from overseas.

 

Nigeria’s International Trade

Nigeria’s international trade has been dominated since independence in 1960, by the importation of manufactured consumer goods from the industrialized countries of Europe and the United States of America. But, lately, many goods are coming from the emerging industrial nations of Southeast Asia, particularly Japan, China and South Korea. These goods range from new and used motor vehicles, textiles, canned food products, machines, chemicals, building materials, electrical and electronic gadgets, etc. The relatively large population of Nigeria (160 million estimate) provides a ready market for imported products. Nigeria’s major exports used to be agricultural products such as, palm oil and palm kernel, cocoa, rubber, groundnuts, and cotton. This trend changed in the mid-1970s, during the oil boom period in Nigeria, when crude oil became the dominant export product and the greatest foreign exchange earner for the country.

Crude oil exports account for over 90 per cent of Nigeria’s total export earnings. Nigeria’s major international trade partners include: Britain, Netherlands, USA, Italy, Japan, Germany, China, France and South Korea etc.

In recent years, however, non-oil exports comprising manufactured goods such as, textiles, cosmetics, plastics, bicycles, cars, drinks etc. have become a major component of Nigeria’s export profile. These manufactured products are traded in countries within the ECOWAS sub-region and other African countries.

 

Organizations in Nigeria

Nigeria’s internal and international trade is run by several business organizations, which may be categorized into two broad groups:

• small scale commercial establishments.
• medium-to-large scale commercial establishments.

 

Small Scale Commercial Establishments (SSCE) are operated by two groups of people:

a) Producer/Traders who sell only the surplus of their household economic products i.e. farm produce, fish, bush meat, local textiles, pottery, farm implements, etc. These products are sold mainly on market days which are periodic. People who fall within this category of SSCEs are farmers, fishermen, hunters, and craftsmen, such as, blacksmiths and wood carvers;

b) Full-time traders, who devote their time to trading activities. Some of them are retailers while others are wholesalers. Men are in the majority of wholesalers and they have large capital and a strong bargaining power. These SSCEs buy commodities from small middlemen in rural markets and sell to retailers in urban markets, the majority of whom are women with little capital. This monopoly enjoyed by wholesalers often gives them the power to fix prices of commodities at will, to the disadvantage of consumers, farmers, retailers, and producer/sellers.

 

Medium and Large Scale Establishments (MLSCE) in Nigeria comprise of commodity marketing boards (public and private); wholesale shops, self-service retail shops or supermarkets; and distributors of imported and locally made goods.

(a) Commodity marketing boards were established in Nigeria during the Second World War to ensure the supply of essential commodities to the European market whose traditional supply was disrupted by the war. The main objectives of the commodity marketing boards are to:

1. fix prices of export crops;
2. ensure an orderly organization of export produce marketing;
3. maintain quality standards for export products;
4. levy taxes on the produce handled and distribute the funds to government agencies and institutions for development and for research purposes; and
5. supply agro-based industries with necessary raw materials. Commodity boards were mandated by right to purchase all scheduled export crops in various parts of the country; however, these commodity boards sometimes have not fulfilled their objectives and mandate.

 

b) Wholesale shops and retail shops or supermarkets found all over the country are all forms of medium-to-large scale commercial establishments in Nigeria. These establishments stock a wide variety of both imported and locally manufactured commodities e.g. groceries, textiles, cutlery, patent medicines, cooking utensils and cold stores.

 

c) A final group of medium-to-large scale commercial establishments are the distributors of both imported and locally manufactured products to retailers. These distributor establishments have their agents and offices located all over the country for effective distribution to local retailers. They include such multinationals as UAC group of companies (e.g. G.B.Ollivant, Kingsway stores, Lever Brothers, A.J. Steward), Leventis group and Patterson-Zochonis (PZ).

The prevailing unemployment in Nigeria has led to the emergence of a booming informal commercial sector in the country. It is a common sight to see unemployed youths retailing all sorts of products ranging from textiles and electronics to household items, among many others, along busy highways in virtually all urban and commercial centres in Nigeria, in particular, Lagos, Abuja, Port Harcourt, Ibadan, Benin city, Enugu, Onitsha.