INTRODUCTION TO COMMERCE-MEANING, SCOPE, TRADE, FUNCTIONS OF COMMERCE AND HISTORY OF COMMERCE–BY INTRUCTOR MRS. ASAKPA, P. E.
MEANING OF COMMERCE: Commerce can be defined as the exchange and distribution of goods and services on a large scale.
SCOPE OF COMMERCE: The scope of commerce is the different activities engaged in by people which can be divided into TRADE and AIDS TO TRADE.
TRADE: Trade is the buying and selling of goods and services. It is also sub divided into home trade and foreign trade.
A] HOME TRADE: Home trade is the act of buying and selling of goods and services within an area of a nation. Goods are sold within the country and it involves the use of the same currency. It is categorized into wholesale and retail.
1. WHOLESALING: Wholesaling is the process of buying goods in large quantity from the producers and making them available to the retailer in smaller quantities. The wholesalers is an intermediary between the producers and the retailers.
2. RETAILING: Retailing is concerned with buying of goods in small quantities from the wholesalers and sell in smaller units to the final consumers.
B] FOREIGN TRADE: It is the buying and selling of goods and services outside a country. Foreign trade/international trade can be bilateral or multilateral which involves the use of different currencies. It is divided into the following:
1. EXPORT: Export is the sale of both raw materials and finished goods to other countries. The goods and services are paid in foreign currencies. It can be visible [cocoa, palm oil]or invisible[banking, aviation].
2. IMPORT: This is the way of buying goods and services from other countries. Goods are imported either in response to direct orders or on consignment. It can be visible or invisible. Example are electronics, automobiles etc.
3. ENTREPOT: Entrepot is the process of importing goods and services for re-exporting to other countries. It is also called re-export trade.
AIDS TO TRADE: These are activities that make trading on a large scale possible. They are also referred to as auxiliaries to trade. These include the following:
BANKING: The banks make funds available to assist people in their daily purchases and capital for embarking on industrial activities.
TRANSPORTATION: This provides the means of carrying raw materials, finished, goods and people from one place to another either by road, sea, rail, pipe or air.
ADVERTISING: Advertising is a process of creating in the mind of the public about the existence of a new product in the market.
WAREHOUSING: This is the process of storing produced goods until they are need in the future. It is to create a regular and steady supply of goods to the public.
COMMUNICATION: It is the means of sending information from one place to another. Supplies and customers can be easily linked together.
INSURANCE: This is a form of provision made against loss. It is the protection against loss suffered in the day-to-day business.
TOURISM: It aids trade by providing tourists trading opportunities at tourist centers. People from different countries can meet in a country because of its tourist attraction.
FUNCTIONS OF COMMERCE: It performs the following functions:
It facilitates mass production of goods and services for people to enjoy within and outside their countries.
It enhances raising of capital for individual needs and investment through the services of banks and other financial institutions.
It creates employment opportunities to a large number of people such as traders, bankers, insurance brokers etc.
Commerce assist movement of people, raw materials and finished goods from the production point to the consumption through transport.
It helps in the storage of goods until they are needed through warehousing.
It brings about unity among nations in their trading activities.
The standard of living is improved through the availability of goods and services.
The taking of risk bearing by insurance companies encourages entrepreneurs to ventures into various business activities.
It facilitates the exchange of goods and services through transportation.
Commerce create public awareness of goods and services produced.
Buyers and sellers are linked together through commerce.
Commerce creates wealth for nations since duties are charged for goods exported or imported.
BRIEF HISTORY OF COMMERCE IN NIGERIA.
Nigerian societies were mainly subsistent in nature. As time went on, some families paid more attention to crop-farming while others concentrated in livestock farming or fishing. Exchange started from at the family level and graduated to community levels. Commercial centers such as Kano, Opobo, Ibadan, Onitsha and Enugu. Kano was notable for the role it played in trans-sahara trade.
However, with the advert of Europeans and colonialisation, modern goods and services were made available while our crops were developed for export purposes[cocoa, groundnut and cotton]. The development of modern infrastructure such as roads, railways, sea, airports, warehouses and telecommunication have continued to promote to the growth of commerce in Nigeria till now.
FACTORS THAT DELAYED THE GROWTH OF COMMERCE IN WEST AFRICA: The factors hindering the growth of commerce in West Africa are highlighted below.
There is no enough capital to expand business.
The level income is very low in West Africa.
The level is illiteracy is low and people are ignorance of the happenings around them.
The frequent changes in political government in West Africa.
There are no financial institutions to assist entrepreneurs.
Another one lack of entrepreneurship.
Non –availability of developed and Institutionalized Market.
FACTOR THAT HELPED THE GROWTH OF COMMERCE:
Specialization has brought about interdependence due to comparative advantages.
The development of modern telecommunication system has eased and enhanced quick contact among countries.
Financial institutions have developed their services rapidly over the years.
The availability of ware house has encouraged production and storing of goods ahead of time.
Advertising has helped in the creation of awareness of good produced to the masses.
There has been improvement in transporting goods and people from one place to another.
The introduction of modern technique in the production of good has brought about large scale economies.
Provision of enabling environment by government for business operation to survive.
The insurance policy has helped to reduce risk involved in business.
The increase in world population has helped commercial activities all over the world.