(a) Account for the inter-dependence in trade between Nigeria and Britain (b) What four factors may limit this trade? (c) State three ways by which the trad...

Answer Details

(a) Interdependence in trade between Nigeria and Britain

The trade between the two countries is based on the exchange of goods that each needs from the other, so that neither is self-sufficient.

1. Nigeria exports primary products (crude oil, cocoa, groundnut, rubber, timber, hides and skins) which Britain needs as raw materials for her industries and as food.
2. Britain exports manufactured goods (machinery, motor vehicles, chemicals, textiles, electrical goods) which Nigeria needs but does not produce in sufficient quantity.
3. Britain provides technical services, capital and expertise for Nigerian industries and projects, while Nigeria provides a large market for British goods.
4. Long historical, colonial and Commonwealth ties, a common language and existing business links bind the two economies together.

(b) Four factors that may limit this trade

1. Long distance between the two countries raises transport and freight costs.
2. Competition from other trading partners such as China, the USA and the European Union.
3. Trade restrictions such as tariffs, quotas and foreign-exchange controls imposed by either country.
4. Similarity/limited range of exports and fluctuation in world prices of Nigeria's primary products, which reduces her earnings and buying power; political and policy changes may be added.

(c) Three ways the trade can be improved

1. Reduction or removal of trade barriers (lower tariffs and easier exchange controls) through trade agreements.
2. Improvement of transport and port facilities to lower the cost and time of moving goods.
3. Diversification and improvement of the quality of Nigeria's exports so that they meet British standards and demand; strengthening of trade missions and credit facilities may be added.