International trade is the exchange of goods and services among countries for money. This involves the importation and exportation of goods and services. Many countries in the world are faced with problems engaging in international trade successfully. However international trade is one of the major determinants of a countries economic growth. Ideally every country should export more goods and services than it import goods and service. This differs on the natural resources, technology and labour force. Nigeria is Africa’s most populous country with a population of over 150 million people. It is one of the largest oil producers in the continent creating huge inflows of foreign income. Without question it holds enormous commercial potential as recent administrations have focused on developing the non-oil economy and tackling corruption. The explosion of the industry such as the mobile telecoms market and the unparalleled success of foreign companies such as South Africa’s MTN have also demonstrated that the potential can be turned into reality. Despite persistent problems corruption and bureaucracy the international business community increasingly sees Nigeria as the central driver of a vast African market that remains the last under-developed commercial market in the world.
Currently Nigeria is faced with so many problems affecting the international trade which is the buying and selling of goods and services with other countries.
In the early days Nigeria’s major exports were cocoa and palm oil, but since the discovery of crude oil Nigeria, things has taken a different turn. In deed the pursuit of Nigeria’s crude oil has taken the character of a gold rush, with major companies from all over the world competing fiercely with one another for access to promising reserves. This ‘oil rush’ has enormous implications both for African oil producers and for the major oil – importing countries for the producing countries it promises both new wealth and a potential severe internal discord over the allocation of oil revenues, for the consuming countries it entails growing dependence on imports of a virtual substance from a region of chronic instability with obvious national security overtones. This research aims to find out the major problems of international trade in Nigeria despite its rich natural resources.
2. LITERATURE REVIEW
Within this literature review, the relevant theories and perception of international trade and its problem in Nigeria have been explored. Dixit and Norman (2002), tells the two broad themes in the theory of international trade. One is qualitative, being concerned with the pattern of trade, that is which country will export which good. The standard theory relates this to comparative advantage that is to international differences in relative opportunity cost and then tries to explain comparative advantage in terms of differences in technologies, factor supplies, etc. this theme is also concerned with the way in which trade in return affects such determinants of comparative advantage. The other theme is more quantitative and seeks to explain the terms of trade, that is relative prices of exports and imports in a trading world. It also examines how they are affected by changes in data such as factor supplies or technology and polices such as tariffs. While they have stated the team as descriptive, it is clear that normative analyses will have to be based on , and will benefit from, a proper understanding of them. Also within this literature review, Rugman and Simon (2009 p 162) states ‘the theory of absolute advantage holds that nations can increase their economic well-being by specializing in the production of goods they can produce more efficiently than anyone else”. Rugman and Simon (2009) also give reasons for trade barriers which effectively raise the cost of imported goods and makes them more expensive to local buyers, this is also a problem of international...