NABTEB Commerce 2023 Theory — Question 1

Model answer

1. Insufficient access to funding: limited availability of financing and credit has been a major impediment to the growth of commerce, as SMEs struggle to obtain reasonably priced capital to grow their businesses. 2. Informal economy predominance: the prevalence of unregistered and unregulated economic activity has obstructed formal trade, as informal sectors lack access to recognised financial services, legal safeguards and regulatory structures. 3. Fragile institutional frameworks: inadequate governance, corruption and deficient institutional frameworks present difficulties for commerce, as inefficient bureaucratic procedures and irregular enforcement of laws discourage investment. 4. Impact of the slave trade: the historical slave trade significantly impeded the progress of commerce in West Africa, causing disruptions to the socio-economic fabric of numerous African communities and leading to a downturn in trade. 5. Inadequate infrastructure: scarcity of proper infrastructure such as roads, bridges and other transportation facilities poses challenges in moving goods from one location to another, constraining commerce's expansion. (Other acceptable factors from the source include: disease prevalence, political instability, colonial impact, and limited diversification of exports.)