Why Does Nigeria Trade with Canada.docx

TITLE: WHY DOES NIGERIA TRADE WITH CANADA

INTRODUCTION

Is it an obligation for countries to trade bi laterally? If a country considers herself to be products and or services self-sufficient needing no form of exchange or trade with other countries can it be a stand-alone or a lone economy country and is it possible to still achieve economic growth or can the rate of growth be matched up to a country that trades internationally?

With the saying "no man is island" it explains that international trade within countries avails them the benefits of interacting with others, enjoys varieties of better quality and less expensive goods and services, enables countries to specialize in production of items at the lowest opportunity cost and makes the world a global economy where each country specializes in producing what its good at as well as increasing efficiency and world peace. This therefore explains why it is important for countries to trade internationally.

Why then does Nigeria trades with Canada? This is because of the comparative advantage Nigeria has over Canada in some products and vice versa. The table below is the current trend of Nigeria and Canada's trade relation (exports and import).

Bilateral Product trade; Canada – Nigeria
Year
Exports
Imports
2011
$227,259,662
$2,491,718,790
2012
$327,091,746
$2,006,126,440
2013
$449,061,216
$1,183,209,630
2014
$529,370,907
$438,828,182
2015
$468,961,353
$981,270,151
Nigeria trades with Canada because there is an avenue for free trade. The trade benefits includes specialization and importation of products that either can produce more efficiently, also Nigeria trades to enlarge their country's consumption possibilities.
Nigeria and Canada trades because each specializes in commodities it can produce with lower production cost for export and import commodities it produces with higher production cost. As Nigeria and Canada specializes it means that output will be increased, there will be technology enhancement, invention of machines as well as the skills, knowledge and productivity of the workers are also enhanced as they learn by doing, makes the world trade efficient as well as encourage economic growth and results to national wealth increases.
They trade for growth in their respective countries economy, if their boarders were closed up to exportation or importation and trades locally within the country, the economic growth is minimized. However, as the boarders are opened to exportation and importation it facilitates economic growth and higher growth rate to raise its income level and standards of living.
Nigeria and Canada figures out the opportunity cost in producing various goods and services, this they examine each ability to use its resources to make a product or service more efficiently than the other and therefore specialized on it. The table below shows the list of Canada – Nigeria export and import
Product Trade (2015) Canada – Nigeria

Section
Exports
Imports
1
Animal & Prod.
$5,566,890
$5,142
2
Veg. Prod.
$219,544,908
$2,469,493
3
Fats, Oils & Waxes Prod.
$12,488
$85,553
4
Food Prod.
$28,244,675
$10,537,906
5
Mineral Prod.
$205,067
$965,178,007
6
Chemical Prod.
$3,757,872
$18,706
7
Plastics, Rubber Prod.
$2,194,148
$2,268,452
8
Leather, Fur Prod.
$4,482
$106
9
Wood Prod.
$435,785
$702
10
Paper Prod.
$1,005,368
$11,970
11
Textiles Prod.
$2,785,947
$34,591
12
Dress Access.
$118,834
$344,559
13
13 Glass & Stone Prod.
$101,551
$66
14
Precious Metals/stones
$4,633
$26,529
15
Base Metal Prod.
$1,266,835
$155,662
16
Mach. Mech. Elec. Prod.
$33,394,302
$18,005
17
Vehicles and Equip.
$158,630,238
$64,865
18
Specialized Inst.
$5,399,020
$14,228
19
Arms & Ammunition
$6,263
$
20
Misc. Articles
$499,426
$2,895
21
Antiques
$

Please note that all statistics reflect Canadian dollars, with some figures reflecting the yearly averages for the year. If listed as '0' or absent, the statistic is unavailable.
From the table above it shows that Nigeria imports more from Canada than it exports therefore, to amass treasure Nigeria needs to export more than they import. Canada is the eight major trade partner to Nigeria; and the sixth major export partner Nigeria has. Also, Nigeria and Canada share values such as multiculturalism, institutions such as federalism and Commonwealth membership, and people-to-people ties which provide a solid foundation for increased engagement, which facilitates trade.
Nigeria has a comparative advantage in labour which facilitates labour trade between Nigeria and Canada.
Nigeria as the smaller nation compared to Canada gets most of the gains from trade, this is because the Canadian business presence in Nigeria is substantial and multi-faceted. Nigeria is designated as an "emerging market with specific opportunities for Canadian business" in Canada's Global Markets Action Plan (GMAP). Canadian interests cover a full range of key sectors, including oil and gas, telecommunications, and manufacturing equipment, aeronautics, energy, and engineering and education services. New areas with high potential for growth are mining technology as well as transportation. Recent and ongoing efforts to reform the banking sector stand to establish a more conducive foreign investment environment, creating potential opportunities for Canadian firms. Educational links are also on the rise; in 2014, Nigeria was Canada's most important source of international students from sub-Saharan Africa.
To promote sustainable economic growth, Canada is developing new programming aimed at increasing employment and business opportunities for Nigerians in areas such as agriculture, forestry and mining. Support is also provided in the area of democratic governance. Canada provided support to the 1999, 2003, 2007 and 2015 elections and also has an ongoing project running until 2015 to strengthen electoral reform processes, improve the functioning of key electoral and democratic institutions, and foster active citizenship and stronger democratic accountability. Since 2010, Canada has sponsored technical assistance to Nigeria's Independent National Electoral Commission. Canada continues to provide support to groups and institutions that work to strengthen democracy, accountability, good governance, and religious freedom in Nigeria.
Canada is also providing security assistance in Nigeria. For example, Global Affairs Canada's Global Partnership Program (GPP) is supporting efforts to strengthen biological security in Nigeria, including through implementation of upgrades at an important biological laboratory.
CONCLUSION
Canada has a well-established and growing trade relationship with Nigeria; as Nigeria represents an important trade partner for Canada in Sub-Saharan Africa. Therefore Nigeria and Canada trade as a result of the comparative advantage which each country has on specific products and the gains from trade. In light of these it is worthy to note that the trade between Nigeria and Canada is for the growth and development of both countries.
REFERENCES
www.canadainternational.gc.ca
May 2016 IMF Statistical Data
Mason A. Carpenter (PhD, 1997, University of Texas at Austin) is the M. Keith Weikel professor of leadership at the University of Wisconsin Madison's Wisconsin School of Business.
www.atmaglobal.com
Canada high commission