(a) What five benefits does Nigeria derive from engaging in international trade?
(b) State and explain five problems likely to be faced by a businessman who wants to sell his goods overseas.
Explanation
(a) Benefits derived by Nigeria for engaging in international trade are:
(i) It leads to specialization: Through international trade, a country can obtain those things that it cannot produce. There is the international division of labour or specialization as every country tends to produce what it has a comparative advantage in.
(ii) Expansion of the world market: Goods are sold in other countries where they are needed.
(iii) Increase in standard of living: The standard of living of the people is increased through international trade e.g in Nigeria, importation of electronics, cars and computers have improved our living standard.
(iv) Equitable redistribution of natural resources: Resources from one country may be beneficial to another country.
(v) It fosters friendly relations among countries.
(vi) Economic development: The poorer countries benefit from advanced countries through international trade and this leads to economic development.
(vii) It creates employment opportunities: This trade attracts foreign investors who may establish firms in other countries that will offer employment opportunities to the people.
(b) Problems likely to be faced by a businessman who wants to sell his goods overseas are:
(i) Distance: The relatively great distance between the countries may delay trade.
(ii) Language: Differences in language create communication barriers and impede foreign trade.
(iii) Currency problem: Another problem likely to be faced is the currency problem. Foreign exchange conversion will impede the flow of goods.
(iv) Political problem: Differences in political opinion and ideologies cripple the free flow of goods between countries of the world.
(v) Artificial barriers: The introduction of high import duties, licenses or outright bans may affect international trade.
(vi) Climatic problem: The harsh climatic condition of a country can drive away foreigners, e.g African nations with high temperatures.
(vii) Cultural problems: The numerous customs and traditions of a country can keep away foreigners.