Normally we all writers know what trade is. When you enter the market you will see many things there. You will see buying and selling you will also see the exchange of goods and services. Simply put, Trade can be referred as the buying and selling or the exchange of goods and services both online or physically present in the market place. Let us look into our topic today we are going to look at types of trade and factors that encourage trade in Nigeria.
MEANING OF TRADE
Definition: Trade is buying and selling or exchange of goods and services between one country and another or between one country and other countries.
TYPES OF TRADE
There are two types of trade, namely:
1. Internal or Home or Domestic Trade; and
2. External or Foreign or International or World Trade.
HOME TRADE: FACTORS FAVOURING , PROBLEMS AND IMPORTANCE OF DOMESTIC OR HOME TRADE
1. INTERNAL OR HOME OR DOMESTIC TRADE
This is the exchange or buying and selling of goods and services within a country. In Nigeria, we have three types of internal trade which include:
(a) Local Trade: This is a trade that takes place in a village, town or at common boundaries of neighboring towns. Local markets meet periodically at 4, 5, 6, 7 or 8 – day intervals. Items sold include agricultural products, foodstuffs, crafts and manufactured goods (mainly consumer goods).
(b) Regional Trade: This type of trade is carried out within a region or state.
(c) Inter-Regional Trade: Here, traders from one state or region move to another to buy and sell.
FACTORS THAT FAVOUR OR ENCOURAGE INTERNAL TRADE IN NIGERIA
The following factors account for the favourable internal trade in Nigeria:
1. Availability of Good Transport Network: Transportation enhances internal trade by linking different regions by good roads and railways.
2. Availability of Wide Market or Demand: This favours or encourages internal trade if a country can consume the commodities being produced in that country.
3. Availability of Common Currency: This will encourage or favour internal trade if the different regions of a country have the same currency, for instance, Nigeria’s Naira and Kobo, which will make sales and purchases easier.
4. Variation or Differences in Climate: Variation or differences in climate enable different regions of a country to produce different products, thereby creating room for internal trade.
5. Varieties or Differences in Products: Internal trade is boosted as a result of different products being produced by different regions of a country, e.g. Kolanuts in southern part and Tomatoes in northern part of Nigeria.
6. Level of Soil Fertility: Different regions of a country have different levels of soil fertility which enables or ensures the production of different crops.
LIMITATIONS OR PROBLEMS OF INTERNAL TRADE
The following are the limitations or problems that retard the level of internal trade in Nigeria:
1. Bad or poor transportation network, e.g. bad roads, moribund railway.
2. Spoilage of perishable products due to poor storage facilities and long distance in transport e.g. meat, tomatoes and vegetables.
3. High rate of rural-urban migration.
4. Unfavourable climate which can lead to low yield and poor harvest.
5. High rate of pests and diseases which attack crops leading to artificial scarcity.
IMPORTANCE OR ADVANTAGES OF INTERNAL TRADE
1. Internal trade provides income to individuals and nations.
2. It provides employment to many people involved in trade.
3. It provides new products to those areas where such products are needed but unavailable.
4. It provides raw materials for industries, e.g. tomato juice / paste industries.
5. It ensures the growth of ancillary services like agro-allied industries and banking.
6. It also promotes diffusion of ideas when people from different regions come together.
7. It fosters inter-regional co-operation within a country.
This is just the first phase of this article. You will read the next phase in my next article. As you can see this article or let me say that my articles are genuine and informative at every level so my desire is to impart knowledge into you. I hope I will do it successfully.
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