CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Legitimate Trade was encouraged after the abolition of the slave trade which was brought about by the great efforts of the British government to end the nefarious traffic which led to her ceding the slave-market fortress, Island of Lagos to the British Crown in 1861. In 1886, the Royal Niger Company which was the amalgamation of all the rival trading companies in the Niger Basin was given a Charter by the British government. Between 1886 and 1900, the Royal Niger Company effectively administered, made Treaties and maintained peace and order in the areas they traded. Trading continued to grow and expand gradually (Ukaoha 2009). In the immediate post –world war II period, Nigeria benefited from a favourable trade balance. The principal exports were agricultural commodities thus, peanuts and cotton from the Northern Region, Palm products from the Eastern Region and Cocoa from the Western Region.
Marketing boards though regionally based were established to handle these exports and to react to price fluctuations in the world market (CBN 1980). During the 1950s, the marketing boards accumulated considerable surpluses. Initially, imports lagged behind exports, although, by mid 1950s imports began to catch up with exports and the surpluses decreased. Expansion in the non-agricultural sectors require large imports of machinery, transport equipment and eventually, intermediate materials for industry. In time, there also were increased administrative costs to be met(CBN 1980) Although per capita income in the country as a whole remained low by international standards, rising incomes among salaried personnel and burgeoning urbanization expanded consumer demand for imported goods (Ukaoha 2009). However, by the act of the British Parliament, Nigeria became an Independent Country within The Common Wealth on October 1st, 1960.