Neco 2025 Commerce Question 2

Practice essay / theory question 2 from the 2025 Neco Commerce examination. This question covers Trade balance, Percentage change, Exchange rate impact, Trade policy .

Neco 2025 Commerce Essay / Theory
Topics: Trade balance Percentage change Exchange rate impact Trade policy
Question 2 NECO • 2025 • COMMERCE • essay

The table below shows Nigeria’s imports and exports of three major commodities for the years 2023 and 2024 (values in million Naira). The average exchange rate was ₦410 per US$ in 2023 and ₦460 per US$ in 2024. | Commodity | Imports 2023 | Exports 2023 | Imports 2024 | Exports 2024 | |-----------|--------------|--------------|--------------|--------------| | Crude Oil | 150,000 | 200,000 | 140,000 | 210,000 | | Cement | 30,000 | 10,000 | 33,000 | 12,000 | | Rice | 45,000 | 5,000 | 50,000 | 6,500 | Answer the following questions.

Question Parts

( a )
Calculate the percentage change in imports and exports for each commodity from 2023 to 2024. Show your working.
( b )
Identify which commodity recorded the highest percentage increase in exports between the two years.
( c )
Compute the overall trade balance (exports – imports) for 2023 and for 2024, and state the change in the balance over the period.
( d )
Discuss how the change in the exchange rate from ₦410/$ to ₦460/$ could have affected the trade balance, assuming that the price elasticity of demand for imports and exports is moderate.
( e )
Recommend one policy measure that the Nigerian government could adopt to sustain a favourable trade balance and justify your recommendation.

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About This Question

This is Neco 2025 Commerce Question 2. It is one of the essay questions from the 2025 Neco Commerce examination.

The question covers Trade balance, Percentage change, Exchange rate impact, Trade policy .

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