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INSTRUCTION: ANSWER FIVE(5) QUESTIONS ONLY
(1a)
Commerce is the exchange of goods and services between two or more entities, typically involving buying and selling for value, often with the aim of making a profit. It encompasses all activities, functions, and institutions that facilitate the smooth distribution of goods and services from producers to consumers, including trade and auxiliary services such as transportation, warehousing, banking, insurance, and advertising.
(1b)
(i) Exchange of Goods and Services:
Commerce facilitates the buying and selling of goods and services, enabling producers, sellers, and consumers to interact. This function is central to commerce, as it allows goods to move from areas of surplus to areas of need, ensuring that consumers can access a wide variety of products and services.
(ii) Transportation:
Commerce ensures the movement of goods from producers to consumers, often over long distances. By using various modes of transport such as trucks, ships, and airplanes, commerce bridges geographical gaps, making products available in different locations and expanding market reach.
(iii) Warehousing (Storage):
Goods are often produced ahead of demand and need to be stored safely until they are required by consumers. Commerce provides warehousing facilities, which help stabilize prices, preserve goods (especially perishables), and ensure a steady supply in the market regardless of seasonal fluctuations.
(iv) Provision of Funds (Financing):
Commerce relies on financial institutions like banks to provide the necessary funds for business operations. These institutions offer loans and credit facilities to traders, producers, and consumers, enabling them to carry out commercial activities, invest in business expansion, and manage cash flow effectively
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(2a)
Home trade is the buying and selling of goods and services within the boundaries of a single country. It involves transactions among people or businesses located in the same nation, using the same currency, and is also called internal, domestic, or national trade.
(2b)
(i) Home trade occurs within one country, whereas foreign trade takes place between two or more countries.
(ii) Home trade uses the same national currency, while foreign trade involves exchanging different currencies.
(iii) Home trade is regulated by local laws, whereas foreign trade is governed by both national and international laws, including tariffs and customs.
(iv) There are no customs duties in home trade, while foreign trade involves customs duties and import/export restrictions.
(v) Home trade usually involves the same language and business customs, whereas foreign trade deals with different languages and cultural practices.
(vi) Home trade carries lower risks due to a familiar environment, while foreign trade has higher risks because of factors like political instability and currency fluctuations.
(2c)
Retail Trade:
Retail trade is a division of home trade that involves buying goods in small quantities from wholesalers or directly from producers and selling them in even smaller units to the final consumers. Retailers are the last link in the distribution chain, bringing goods directly to consumers, offering a variety of products, and sometimes providing additional services like credit, advice, and after-sales support.
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(3)
(i) Certificate of Origin
A document issued by an authorized body certifying the country where the goods were produced or manufactured. It is essential for customs clearance and determines applicable tariffs and trade agreements. This document helps prevent fraud and ensures that goods comply with trade regulations.
(ii) Freight Note
A document issued by the carrier confirming receipt of goods for shipment. It includes details such as description of goods, weight, and freight charges, serving as proof of contract between shipper and carrier. The freight note also facilitates tracking and delivery of the shipment.
(iii) Ship Manifest
A detailed list of all cargo, passengers, and crew on board a ship. It is used by customs and port authorities to verify the contents of the shipment and ensure regulatory compliance. The manifest helps in efficient inspection and clearance of goods at ports.
(iv) Insurance Certificate
A certificate issued by an insurance company that confirms the goods are insured against loss or damage during transit. It specifies coverage details, insured value, and risk period. This document provides financial protection and peace of mind to the buyer and seller.
(v) Indent
A formal purchase order sent by an importer to an exporter specifying the type, quantity, quality, and price of goods required. It initiates the process of procurement in international trade. The indent ensures clarity and agreement on the terms before the transaction proceeds.
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(4)
(i) Acceptability:
Money must be widely accepted by people as a medium of exchange in all transactions. This acceptability is usually guaranteed by government declaration, making the currency legal tender within the country. Without universal acceptance, money would fail to function effectively as people would refuse to accept it in trade. For example, the Nigerian Naira is accepted across Nigeria because it is backed by the Central Bank of Nigeria, ensuring trust and confidence.
(ii) Durability:
Money should be physically strong and able to withstand repeated handling and use over time without deteriorating. Durable money reduces the cost of frequent replacement and maintains its usability in the economy. Materials like metal coins and specially treated paper notes are used to enhance durability. If money were fragile, it would quickly become unusable, disrupting trade and economic activities.
(iii) Portability:
Money must be easy to carry and transfer from one person to another without difficulty. This portability allows people to conduct transactions conveniently whether in markets, shops, or online. Lightweight notes and coins, as well as digital money, enhance portability by making it simple to carry large sums or make payments quickly. If money were bulky or heavy, it would be impractical for everyday use.
(iv) Divisibility:
Money should be easily divisible into smaller units to facilitate transactions of varying sizes. This allows buyers and sellers to exchange exact amounts without difficulty, whether for small purchases or large payments. For example, the Naira is divided into kobo, enabling precise pricing and payment. Divisibility ensures that money can serve all levels of economic activity, from minor retail sales to major business deals.
(v) Stability or Store of Value:
Money should maintain a relatively stable value over time so that it can reliably store purchasing power. Stability encourages people to save money and plan for future expenses without fear of losing value due to inflation or depreciation. When money is stable, it fosters confidence in the economy and supports long-term economic growth. If money’s value fluctuated wildly, it would discourage saving and disrupt trade.
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(5a)
Credit is a contractual agreement in which a borrower receives money, goods, or services now and agrees to repay the lender later, often with interest. It allows individuals or businesses to obtain something of value immediately while deferring payment to a future date.
(5b)
(i) Increased Sales Volume
Credit sales enable customers to buy goods even if they do not have immediate cash, which can lead to higher sales and expanded customer base for businesses.
(ii) Customer Loyalty
Offering credit builds trust and strengthens relationships with customers, encouraging repeat purchases and long-term business.
(iii) Competitive Advantage
Businesses that provide credit terms often attract more customers compared to those requiring cash payments only, giving them an edge over competitors.
(iv) Improved Cash Flow Management
Although payment is deferred, credit sales can help businesses plan and manage cash flow better by scheduling collections and maintaining steady sales levels.
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(6)
(i) Clarity of Objective
This principle states that every organization or department should have a clear and well-defined objective. Clear objectives guide employees’ efforts and help in measuring performance. Without clarity, resources may be wasted, and employees may work at cross purposes. It ensures everyone understands the goals to be achieved, promoting focus and coordination.
(ii) Unity of Command
Unity of command means that each employee should receive orders and instructions from only one superior. This prevents confusion, conflicting instructions, and divided loyalties. It establishes a clear chain of command, making employees accountable to a single manager. This principle enhances discipline and improves organizational efficiency.
(iii) Unity of Direction
Unity of direction requires that all activities aimed at the same objective should be directed by one manager using one plan. This ensures coordinated efforts and avoids duplication of work. It aligns the organization’s resources and personnel towards common goals. Unity of direction promotes teamwork and effective use of resources.
(iv) Division of Labour
Division of labour involves breaking down work into specialized tasks performed by different individuals or groups. This specialization increases efficiency and productivity as workers become skilled at their specific tasks. It reduces fatigue and saves time by avoiding task switching. Division of labour also facilitates training and supervision.
(v) Scalar Chain
Scalar chain refers to the formal line of authority in an organization from the highest to the lowest ranks. It ensures clear communication and command flow through hierarchical levels. Following the scalar chain maintains order and discipline by defining who reports to whom. It helps in resolving conflicts and making decisions systematically.
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(7)
(i) Consumer Cooperative Society:
Consumer cooperatives are formed by consumers who join together to purchase goods and services in bulk directly from producers or wholesalers. The main objective is to provide members with quality goods at reasonable prices by eliminating middlemen. These societies help protect consumer interests, stabilize prices, and prevent exploitation through black marketing. For example, a consumer cooperative may operate a retail store selling essential commodities to members at lower prices.
(ii) Producer Cooperative Society:
Producer cooperatives are established by small producers, artisans, or farmers who pool their resources to obtain inputs like raw materials, tools, or machinery at affordable rates. They also assist members in marketing their products collectively to get better prices and reduce the influence of middlemen. These societies aim to increase production efficiency, improve product quality, and strengthen the bargaining power of small producers. For instance, a farmers’ cooperative may help members buy seeds and fertilizers and sell their harvest collectively.
(iii) Marketing Cooperative Society:
Marketing cooperatives focus on helping producers sell their goods at fair prices by eliminating intermediaries. They collect, store, package, transport, and sell members’ products in bulk to secure better market access and prices. This type of cooperative improves producers’ competitive position and ensures a steady market for their products. For example, a dairy cooperative collects milk from farmers and sells it under a common brand.
(iv) Credit Cooperative Society:
Credit cooperatives provide financial assistance to members by offering loans and credit facilities at reasonable interest rates. These societies protect members from exploitative moneylenders and help meet short-term financial needs for personal or business purposes. They mobilize savings from members and use these funds to grant loans, fostering financial inclusion among low-income groups. For example, a rural credit cooperative may provide agricultural loans to small-scale farmers.
(v) Housing Cooperative Society:
Housing cooperatives are formed to help members, especially those with limited income, acquire affordable housing. Members contribute savings to a common fund used to purchase land and construct houses or flats. These societies enable members to own or rent homes at lower costs and often allow payment in installments. Housing cooperatives address housing shortages and improve living conditions for their members. For example, a cooperative may build residential apartments for its members in urban areas.
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(8a)
Deregulation is the process of removing or reducing government regulations and restrictions in a particular market, industry, or economy . Its primary aim is to foster greater competition within the industry by allowing businesses to operate with more freedom and less government oversight . This reduction in bureaucratic obstacles is intended to make it easier for companies to conduct business and innovate.
=ADVANTAGES OF DEREGULATION=
(i) Increased Competition: Deregulation aims to remove barriers to entry, allowing new businesses to enter the market and compete with established players . This heightened competition can lead to more choices for consumers and drive down prices .
(ii) Economic Growth and Innovation: By reducing the “red tape” and costs associated with regulations, businesses have more capital and flexibility to invest and innovate . This can stimulate economic activity, leading to the development of new products and services .
(iii) Lower Prices for Consumers: Increased competition often translates to lower prices as businesses vie for market share . Consumers benefit from more affordable goods and services due to reduced operational costs for businesses .
(iv) Increased Efficiency: Without the burden of extensive regulations, businesses can operate more efficiently, making quicker decisions and optimizing their processes . This leads to more streamlined operations and improved productivity .
(v) Job Creation: When businesses find it easier and cheaper to operate and expand, they are more likely to grow and hire more employees . This can lead to lower unemployment rates and a stronger labor market .
(vi) Global Competitiveness: Deregulation can enhance a country’s industries’ ability to compete in the international market by reducing operational costs and increasing flexibility, allowing them to respond more quickly to global demands.
=DISADVANTAGES OF DEREGULATION=
(i) Potential Harm to Consumers and Workers: Critics argue that deregulation can lead to ethically questionable business practices and reduced accountability . This may result in detrimental impacts on consumer protection, health, safety, and worker rights, as standards might be lowered or ignored without strict oversight .
(ii) Environmental Concerns: The removal of regulations, especially in areas concerning hazardous materials or environmental quality standards, can lead to increased pollution and negative environmental impacts . Businesses might prioritize profit over environmental protection if not legally mandated to comply with strict regulations.
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(9)
(i) Promotion of Economic Cooperation and Integration:
ECOWAS aims to foster economic cooperation among its member states to create a unified economic space. This involves harmonizing and coordinating policies in trade, agriculture, industry, transport, and finance to establish an economic union. The goal is to raise the living standards of the people by promoting sustainable economic development across West Africa.
(ii) Establishment of a Common Market:
One of ECOWAS’s key objectives is to create a free trade area by abolishing customs duties and non-tariff barriers among member states. This facilitates the free movement of goods, services, capital, and people within the region, enhancing intra-regional trade and economic growth. The adoption of a common external tariff further strengthens this integration.
(iii) Promotion of Peace, Security, and Political Stability:
ECOWAS works to maintain peace and stability in the region by addressing conflicts and fostering dialogue among member states. It has developed peacekeeping forces and mechanisms to manage political crises, ensuring a stable environment conducive to development and cooperation.
(iv) Harmonization of Monetary and Fiscal Policies:
ECOWAS seeks to coordinate monetary and fiscal policies among member states, including the eventual creation of a common currency. This harmonization aims to stabilize economies, control inflation, and facilitate cross-border trade and investment within the region.
(v) Development of Infrastructure and Joint Ventures:
ECOWAS promotes the development of regional infrastructure such as transport, energy, and communication networks to enhance connectivity and economic activities. It also encourages joint ventures and cooperation among private sector enterprises to boost industrialization and economic diversification.
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