Nigeria – comparative advantage

The article is about the relationships that Nigeria is having with United States of America. They do not seem to be good at all and require the necessary revival. One of the things that can improve the situation prevailing among them is the exchanging of goods and services. In this way, the people of both of the countries will gain benefits. One thing to make sure is that the trading should be benefiting to both of its parties. The country should become specialized in which they are incurring lower cost. Products should be chosen from both of the sides. Due to the terror incident in Detroit that was done by an American born Nigerian youth, the relationship between the two countries stumbled. In 2008, Nigeria exported the oil worth of $35.1 billion and on the other side; America has exported $927.6 million worth of wheat in the same year. There was no trade of oil from America to Nigeria and no trade of wheat from Nigeria to America that means Nigeria has a complete advantage over America in the production of crude and America has a complete advantage of wheat over Nigeria.

Both can benefits if they get specialized in each product. It is true that if the Nigerian government can provide its focus over the other products as well like the Cocoa beans, it can earn a huge amount of money from its trade. Only focusing over crude oil cannot give the country’s economy an edge to grow further. The America can benefit at the time when it exports the things required by Nigeria, and on the other side, Nigeria can improve its economic condition if it sends the products required by America in the competitive beneficial rates. Sale of the crude oil has been the source of earning money for the Nigerian government. Due to the sale of the crude oil to America, the economy of the country flourished to a large extent and the growth rate increased to 8.23% in the last quarter of 2009.