NECO Commerce OBJ 2025
01-10: CBBDDADCDD
11-20: BBCABEDACD
21-30: CDEACADBEE
31-40: BABECEEBED
41-50: DADDCAADCC
51-60: EBCEBAEEAB
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NECO Commerce Essay 2025
ANSWER FIVE(5) QUESTIONS ONLY
Number 1
(1a)
Commerce is the branch of business that deals with the exchange of goods and services and all the activities that facilitate this exchange. It includes trade (buying and selling) and auxiliaries to trade such as transportation, banking, insurance, advertising, warehousing, and communication. The aim of commerce is to bridge the gap between producers and consumers by ensuring goods and services move from the point of production to the point of consumption.
(1b)
(i) Facilitates Exchange of Goods and Services:
Commerce enables the buying and selling of goods and services between producers and consumers or between businesses. This is achieved through various forms of trade (home trade and foreign trade), making products available where and when they are needed.
(ii) Bridges the Gap Between Producers and Consumers:
Commerce ensures that goods produced in one place can reach consumers in other locations. Through activities like transportation and distribution, it links the point of production to the point of consumption, overcoming barriers of distance and time.
(iii) Provides Employment Opportunities:
The commercial sector creates jobs in various fields such as trading, transportation, banking, advertising, warehousing, and insurance. These opportunities contribute significantly to economic development and income generation.
(iv) Promotes Economic Development:
By facilitating trade and supporting industries through services, commerce boosts productivity and income. It encourages investment, innovation, and specialization, which in turn lead to overall growth in the economy.
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Number 2
(2a)
Home trade refers to the buying and selling of goods and services within the boundaries of a single country. It involves transactions between individuals, businesses, or organizations that are all located in the same country. Home trade is carried out in the same currency and is regulated by the laws and policies of the country.
(2b)
(i) Home trade takes place within one country, while foreign trade involves two or more countries.
(ii) Home trade uses the same national currency, whereas foreign trade involves the exchange of different currencies.
(iii) There are fewer restrictions and formalities in home trade, while foreign trade requires licenses, customs duties, and tariffs.
(iv) In home trade, language and culture are usually the same, whereas in foreign trade, there may be differences in language and culture.
(v) Transportation is cheaper and faster in home trade, while foreign trade involves higher transportation costs and time.
(vi) Home trade is governed by local trade laws, whereas foreign trade is subject to international trade regulations.
(2c)
Retail Trade:
Retail trade is a division of home trade that involves the selling of goods and services in small quantities directly to the final consumer for personal or household use. Retailers act as middlemen between wholesalers or manufacturers and the end users. Examples of retail businesses include supermarkets, kiosks, market stalls, and online shops.
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Number 3
(3)
(i) Certificate of Origin:
A certificate of origin is a document that certifies the country in which goods were manufactured or produced. It is used in international trade to determine tariff treatment, as some countries offer reduced duties for goods originating from certain nations. It is usually issued by a chamber of commerce or a government agency.
(ii) Freight Note:
A freight note is a document issued by a shipping or transport company showing the cost of transporting goods from the seller to the buyer. It includes details such as the type of goods, weight, distance, mode of transport, and total freight charges. It helps both parties in accounting and confirming delivery costs.
(iii) Ship Manifest:
A ship manifest is a detailed list of all cargo and passengers carried on a ship. It includes information like the names of consignors and consignees, description of goods, quantities, and ports of loading and discharge. It is used by customs authorities for inspection and clearance.
(iv) Insurance Certificate:
An insurance certificate is a document provided by an insurance company to confirm that goods in transit are insured against risks such as loss, theft, or damage. It gives details of the coverage, including the value insured, type of risk covered, and the name of the insurer.
(v) Indent:
An indent is a formal order placed by an importer to a supplier or exporter for the purchase of goods. It contains details like description of goods, quantity, price, delivery instructions, and payment terms. It can be either an open indent (no specific supplier mentioned) or a closed indent (supplier specified).
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Number 4
(4)
(i) Durability:
Durability refers to the ability of money to last a long time without deteriorating or losing its usefulness. Since money passes through many hands during transactions, it must not wear out quickly or get easily destroyed by handling, weather, or other conditions. For this reason, materials such as metal, polymer, and treated paper are used to make coins and banknotes. Durable money reduces the cost of replacement and ensures reliability in everyday use.
(ii) Portability:
Money must be lightweight and easy to carry from one place to another. This quality makes it possible for individuals to carry enough money to meet their daily or business needs. If money were bulky or heavy (like large stones or bags of grain), it would be inconvenient and limit the ease of transactions. Modern currencies are designed to be compact, both coins and paper notes can be carried in wallets or electronically through mobile devices, enhancing the efficiency of commerce.
(iii) Divisibility:
A good monetary system must allow money to be broken down into smaller units to facilitate transactions of varying values. This means money should be available in different denominations so that people can buy both expensive and inexpensive items without complications. For example, in Nigeria, the naira is divisible into 100 kobo, with coins and notes ranging from ₦1 to ₦1000. Without divisibility, exact payments and change-giving would be difficult, leading to inefficiencies in trade.
(v) Acceptability:
Money must be universally accepted as a medium of exchange within a given economy. This means people must trust in its value and be willing to use it for buying and selling. Acceptability is influenced by public confidence, government backing, and legal status. If money is not widely accepted, it cannot serve its purpose, and barter may resurface. Legal tender laws often support acceptability by mandating the use of a specific currency in all financial dealings within the country.
(v) Stability of Value:
A stable value means that money must maintain its purchasing power over time. If the value of money fluctuates rapidly (as seen during inflation or currency devaluation), it becomes unreliable. Stability helps people plan for the future, save money, and engage in long-term contracts. When money loses value quickly, people may rush to spend it, reject it, or switch to foreign currencies disrupting the economy. Central banks work to stabilize money’s value through monetary policy and regulation.
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Number 5
(5a)
Credit refers to a financial arrangement where goods, services, or money are provided to a buyer or borrower with the promise to pay at a later date. In business, it means selling goods to customers who agree to pay in the future, often under agreed terms. Credit is a common practice in both consumer and commercial transactions, and it plays a key role in facilitating trade, especially when immediate payment is not possible.
(5b)
(i) Increases Sales Volume:
Credit sales often encourage more customers to buy, especially those who may not have immediate cash. By allowing deferred payment, sellers can attract a wider customer base, leading to higher turnover and revenue. It is especially useful in competitive markets where buyers prefer flexibility.
(ii) Builds Customer Loyalty:
Offering credit can build trust and long-term relationships between the seller and the buyer. Customers who benefit from such flexibility are more likely to return and remain loyal to the business, giving it a competitive edge.
(iii) Promotes Business Growth:
When businesses extend credit, they often expand their market reach, attracting customers who would otherwise delay or cancel purchases. This can help businesses grow faster, gain market share, and achieve economies of scale.
(iv) Provides Competitive Advantage:
In markets where competitors offer cash-only sales, credit sales can differentiate a business and give it an advantage. Customers tend to prefer suppliers who provide convenient payment terms, increasing the seller’s attractiveness over competitors.
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Number 6
(6)
(i) Clarity of Objective
This principle states that every organization must have clear and well-defined goals or objectives. Managers and employees should fully understand what the organization aims to achieve. When objectives are clearly stated, it ensures proper planning, effective decision-making, and coordinated effort across departments. It also helps to measure performance and guide individual tasks toward achieving common goals. Lack of clarity can lead to confusion, misdirection, and waste of resources.
(ii) Unity of Command
Unity of command means that each employee should receive orders from only one superior at a time. This avoids conflict, confusion, and divided loyalty. When workers report to multiple managers, it may lead to contradictory instructions and inefficiency. The principle promotes clear authority and responsibility, which enhances discipline and accountability within the organization. It is a key element in maintaining organizational order and effective communication.
(iii) Unity of Direction
This principle states that activities with the same objective should be directed by one manager using one plan. Unity of direction ensures that departments or teams working toward similar goals are aligned and coordinated. For example, all marketing efforts should be managed under a unified strategy, not scattered under different directions. This avoids duplication, enhances coordination, and leads to the efficient use of resources.
(iv) Division of Labour
Division of labour involves breaking down tasks into smaller, specialized jobs assigned to different individuals or groups based on their skills and expertise. It increases productivity by allowing workers to concentrate on what they do best, leading to greater speed, efficiency, and accuracy. It also facilitates training and helps in assigning responsibility. However, over-specialization may lead to boredom or lack of flexibility, so balance is necessary.
(v) Scalar Chain
Scalar chain refers to the line of authority from the highest level of management to the lowest. It shows the formal chain through which communication and command flow in an organization. A clear scalar chain ensures discipline, orderly communication, and proper flow of instructions. However, in urgent cases, shortcuts (called gangplanks) may be allowed to speed up communication, provided they do not undermine the formal structure.
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Number 7
(7)
(i) Consumer Cooperative Society:
This type of cooperative is formed by consumers who come together to purchase goods in bulk directly from producers or wholesalers, with the aim of eliminating middlemen and reducing costs. Members buy goods at fair prices, and profits made are either reinvested or shared among members. It protects consumers from exploitation and ensures access to quality goods.
(ii) Producer Cooperative Society:
This society is made up of producers (such as farmers, artisans, or manufacturers) who pool their resources together to carry out production more efficiently. They may share equipment, storage, marketing, and distribution channels. This helps reduce production costs, improves bargaining power, and allows members to enjoy economies of scale while still maintaining ownership of their individual operations.
(iii) Credit Cooperative Society:
Credit cooperatives are formed to provide financial assistance to members in the form of loans at low interest rates. Members contribute savings regularly, which is used as a loan pool. It encourages thrift, discourages borrowing from exploitative moneylenders, and provides a reliable financial safety net for members. It is particularly common among workers, traders, and rural dwellers.
(iv) Marketing Cooperative Society:
Marketing cooperatives are established by producers or sellers to assist in the marketing and sale of their products. The society helps in packaging, branding, advertising, transporting, and negotiating better prices for members. This helps protect members from price fluctuations, exploitation by middlemen, and poor market access. It ensures fair returns for their products and improves market reach.
(v) Multipurpose Cooperative Society:
As the name implies, this type combines the functions of two or more cooperative societies, such as production, credit, and marketing. It offers a wide range of services to members under one organization. For example, it may give loans, help members market their products, and supply essential goods. It is highly flexible and popular in rural communities for addressing various socio-economic needs at once.
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Number 8
(8a)
Deregulation refers to the removal or reduction of government controls and restrictions in an industry or sector, especially in areas like pricing, licensing, or market entry. The aim is to allow for more competition, efficiency, and private sector participation. It encourages a freer market environment where businesses operate with minimal interference from the government. Deregulation is common in sectors such as telecommunications, petroleum, power, and transportation.
(8b)
=Advantages of Deregulation=
(i) Increased Competition:
Deregulation allows more private firms to enter the market, leading to healthy competition. This usually results in better services, improved product quality, and lower prices for consumers.
(ii) Efficiency and Innovation:
With fewer government restrictions, companies have the freedom to innovate, reduce costs, and adopt modern technology. This improves efficiency and boosts overall productivity in the industry.
(iii) Encourages Private Investment:
Deregulation makes an industry more attractive to local and foreign investors, since they are assured of fewer bureaucratic hurdles and better profit prospects. This leads to increased capital inflow.
(iv) Improved Service Delivery:
The pressure to attract and retain customers in a competitive market encourages businesses to provide better and more customer-oriented services.
(v) Reduction of Government Burden:
It reduces the financial and administrative responsibilities of government, allowing it to focus on regulation, policy-making, and other critical national issues.
(vi) Boosts Economic Growth:
By creating a more dynamic business environment, deregulation can stimulate economic activities, create jobs, and increase government revenue through taxes and licensing.
=Disadvantages of Deregulation=
(i) Exploitation of Consumers:
In the absence of strong regulation, some firms may form monopolies or cartels, fixing prices unfairly and exploiting consumers, especially in essential sectors like fuel or electricity.
(ii) Decline in Quality Standards:
Without government oversight, some companies may cut corners to reduce costs, leading to poor-quality goods or unsafe services, particularly in sectors like healthcare, aviation, and food.
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Number 9
(9)
(i) Promotion of Economic Integration
ECOWAS aims to integrate the economies of West African countries by encouraging the free flow of goods, services, labour, and capital among member states. Through the removal of trade barriers and harmonization of policies, the region can develop a unified economic space that increases trade, industrial development, and collective growth.
(ii) Establishment of a Common Market
One major objective is to create a common market among member countries where there is free trade and uniform external tariffs. This helps to attract investments, strengthen regional industries, and reduce dependence on external economies. A common market also ensures fair competition and benefits from economies of scale.
(iii) Promotion of Peace and Security
ECOWAS seeks to maintain political stability and security in the region through peacekeeping missions, conflict resolution, and collective defense strategies. By preventing and resolving internal conflicts among member nations, ECOWAS contributes to a peaceful environment necessary for sustainable development and regional cooperation.
(iv) Improvement of Transportation and Communication
Another objective is to develop and coordinate transport and communication networks across West Africa. This includes improving roads, railways, air routes, and telecommunication systems to facilitate movement of goods and people. Better infrastructure strengthens economic ties and supports social integration.
(v) Harmonization of Economic and Monetary Policies
ECOWAS aims to align the monetary and fiscal policies of member states to ensure stability and cooperation. This involves efforts toward creating a single currency (like the proposed ECO), reducing exchange rate problems, and encouraging a more predictable macroeconomic environment. Harmonization also helps in controlling inflation and encouraging cross-border investment.
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