Gain admission into 200 level to study any Course of your Choice in any University of your Choice NO JAMB/LOW FEES. Registration is in Progress. Call 07066646818.

Economics Lesson Note for SS3 (First Term) 2023

Economics lesson note for SS3 First Term is now available for free. The State and Federal Ministry of Education has recommended unified lesson notes for all secondary schools in Nigeria, in other words, all private secondary schools in Nigeria must operate with the same lesson notes based on the scheme of work for Economics.

Economics lesson note for SS3  first Term has been provided in detail here on

Economics Lesson Note for SS3 (First Term) [year] 1

For prospective school owners, teachers, and assistant teachers, Economics lesson note is defined as a guideline that defines the contents and structure of Economics as a subject offered at SS level. The lesson note for Economics for SS stage maps out in clear terms, how the topics and subtopics for a particular subject, group works and practical, discussions and assessment strategies, tests, and homework ought to be structured in order to fit in perfectly, the approved academic activities for the session.

To further emphasize the importance of this document, the curriculum for Economics spells out the complete guide on all academic subjects in theory and practical. It is used to ensure that the learning purposes, aims, and objectives of the subject meant for that class are successfully achieved.

Economics Lesson note for SS3 carries the same aims and objectives but might be portrayed differently based on how it is written or based on how you structure your lesson note. Check how to write lesson notes as this would help make yours unique.

The SS3 Economics lesson note provided here is in line with the current scheme of work hence, would go a long way in not just helping the teachers in carefully breaking down the subject, topics, and subtopics but also, devising more practical ways of achieving the aim and objective of the subject.

The sudden increase in the search for SS3 Economics lesson note for First Term is expected because every term, tutors are in need of a robust lesson note that carries all topics in the curriculum as this would go a long way in preparing students for the West African Secondary Examination.

This post is quite a lengthy one as it provides in full detail, the government-approved lesson note for all topics and sub-topics in Economics as a subject offered in SS3.

Please note that Economics lesson note for SS3 provided here for First Term is approved by the Ministry of Education based on the scheme of work.

I made it free for tutors, parents, guardians, and students who want to read ahead of what is being taught in class.

SS3 Economics Lesson Note (First Term) 2023


Economics lessons from the Asian Tigers, Japan, Europe and

Economics lessons from the Asian Tigers, Japan, Europe and America 2

Human Capital Development

Petroleum and the Nigeria Economy

Economics SSS3 First Term Mid-Term Assessment


Service Industries

Agencies that regulates the financial markets

Functions and Roles of Regulatory Agencies

International Trade

International Trade (2)

Economics SSS3 First Term Final Assessment


Manufacturing and Construction


Economics lessons from the Asian Tigers, Japan, Europe and America 1

Performance Objectives

Student should be able to:

  1. Explain the factors that account for the rapid development of those countries in South East Asia
  2. Explain the meaning of the Japanese miracle


Economics history of the Asian Tigers

The Four Asian Tigers are the fast-growing economies of Singapore, Hong Kong, Taiwan and South Korea. The four Asian nations have consistently sustained high-growth economic rate since the 1960s, charged by rapid industrialization and exports, which facilitated these economies to be in line with the world’s wealthiest nations.

Hong Kong and Singapore are among the most prominent worldwide financial centres, while South Korea and Taiwan are essential hubs for the global manufacturing of automobile and electronic components, as well as information technology.

The world economic growth began to pick up during the early 1960s after the World War II and the Korean War in the early 1950s. Major leaps in air telecommunications and air travel coupled with probable world peace indicated that world countries were opening up their borders and thus the Four Tigers took advantage of this opening. The four countries had viable trade economies, established ports, high literacy levels and advanced infrastructure inherited from their colonial masters.

Owing to this development, the Asian Tigers took advantage of the situation since they were quite poor in the 1960s; these countries had plenty of inexpensive labour. Combined with educational restructuring, they were smart to leverage this amalgamation into a low-priced, yet industrious labour force. The Asian Dragons devoted to social equality in terms of land reforms, promotion of property rights and welfare of agricultural workers. In a little while, products and services from these nations were in high demand.

A booming stock exchange had already begun in 1891 in Hong Kong; thus it was reasonable when it drifted to financial services from the export market. Hotly followed by Singapore the two tiny nations are currently important global financial centres. During that interval South Korea and Taiwan were propelling the 1980’s -1990’s tech boom, nowadays Taipei and Seoul are leaders in cutting-edge technology and also home to the biggest names in electronics. These advancements happened so quickly hence the nickname ‘The Asian Miracle‘.

The economic growth of the Four Asian nations enabled them to sail through the local 1997 Asian Financial Crisis and also 2008 World Economic Crisis. At present these four nations significantly get enlisted in IMF’s global list of top 40 advanced economies.

Factors that account for the rapid development of the Asian Tigers

Some of the factors that account for the rapid development of these countries in South East Asia are:

  1. High savings rate:The Asian Tigers embarked on a very high savings rate and that meant that they were able to have a very high investment rate with investments that they funded. Savings are more important because they a means to an end and reasonable way to fund investment.
  2. Education:The high level of literacy among the Asian Tigers underpinned the economic development of the country.
  3. Labour supply:There is a plentiful supply of workers for countries in South East Asia with a steady stream of rural-urban migrants in search of work. This is due to the mechanization of agriculture leading to unemployment and under-employment in rural areas and concurrent growth in industrial work in urban areas.


  1. Stable and relatively low wages:The Tigers kept their wages very low. This means that they produce more products at low prices to consumers around the world. To keep the wages low, meant that they had to engage in macroeconomic policies that kept their currencies relatively cheap and to sustain political support in delivering goods that made the economy richer, while not receiving high wages, yet the later was seen as part of the plan, and it is something that worked.
  2. A relatively open trading system: There was a relatively open trading system in the Far East, which considerably helped to stimulate cost-efficiency and changes.
  3. Presence of an abundance of natural resources:There was an abundance of various kinds of natural resources. Agricultural and mineral resources were abundantly available for the Tigers to use which aided the economic development of the Asian countries.
  4. Strong leadership: The Asian Tigers politicians are said to feel a greater responsibility to the nation than to themselves. Strong leadership from the head of state has been a major factor contributing to economic success.

The Japanese miracle

A term for the remarkable economic growth Japan experienced after its devastation in World War II. The growth is credited to a combination of American investment immediately after the war and government regulation of the economy. The Japanese government restricted imports and promoted exports. Meanwhile, the Bank of Japan lent vast amounts to companies to stimulate private investment. This combined with a close relationship between corporate executives and bureaucrats allowed the government to pick winners successfully. The Miracle lasted until the Japanese financial crisis, which started in 1991.

Development strategies employed by Asian Tigers, Japan, Europe and America

  1. Investment in skill:The South-East Asian region has experienced some of the highest growth rates in the world, with investments in skills playing a significant role in helping national economies to adjust to changes in working practices.
  2. Advance in Technology:This has also helped the south East Asian to excel. This process has been successfully managed and significant advances have been achieved in growth rates and employment levels.
  3. A well developed financial sector:Europe has a well developed financial sector with financial institutions among the leading ones in the world. This makes for easy accumulation and transfer of capital for investment.
  4. Economic integration:Integration in many areas of development created economies of scale and increased the level of investment in these countries.
  5. Effective and stringent public policies:This consisted of credible macroeconomic policies that kept inflation low, interest rates low, fiscal policies that focused on rising saving rates and investment rates, as well as policies that enhanced the development of infrastructure. These factors consequently promoted private investment and growth.


Economics lessons from the Asian Tigers, Japan, Europe and America 2

Performance Objectives

Student should be able to:

  1. Differentiate between the development strategies of Asian Tigers, Japan, Europe and America.
  2. Identify the lessons for Nigeria


Lesson for the Nigerian economy

Many of the Asian Tiger strategies are a replica of Europe’s and America’s strategies. Nigeria has the following lessons to learn from the Asian Tigers

  1. The Nigerian educational system should be stabilized through policies that will end incessant school closures. It should also be reformed to focus on skill acquisition rather than mere certification.
  2. Proper and effective management of resources should be embraced. Looting of the nation’s resources must be discouraged and corruption addressed with zeal.
  3. A financial and banking system that favours savings and encourages business growth should be pursed. Government and private savings should be encouraged to improve future investment which is necessary for development.
  4. Proper management of the macroeconomic environment especially the management of variables like public debts, deficit and exchange rate.
  5. Nigeria’s export policy should focus on areas of comparative advantage or preference e.g. agriculture. Nigeria should increase its production and export of product like cocoa and groundnut to increase its foreign exchange earnings rather than depend solely on crude oil earnings.
  6. Development of small and medium scale enterprises (SMEs). Nigeria can learn from Asian Tigers on SME development. SMEs in all countries around the world are enjoying a new focus now because it is the foundation for the development of any country.




Human Capital Development

Performance Objectives

Student should be able to:

  1. Define human capital.
  2. Explain the factors affecting the efficiency of human capital
  3. Distinguish clearly between human and physical capital
  4. Define brain drain.


Definition of Human Capital

Human capital is the stock of habits, knowledge, social and personality attributes embodied in the ability to perform labour to produce economic value. Alternatively, it refers to the value that is added onto a company by an employee’s skill and competencies.

Human capital is an important factor of production, and employing individuals with the right education, experience, skills and training can improve efficiency, productivity and profitability. Companies can invest in their human capital by offering training and education facilities to its worker.

Definition of Physical capital

Physical capital refers to assets which themselves have been manufactured and are used for the production of other goods and services.

An important point to note is that physical and human capital must go hand in hand for a business to run its operations successfully.

Differences between human capital and physical capital

  1. Human capital is human assets. On the other hand, physical capital is non-human assets i.e. they are made by man
  2. Human capital can appreciate through education, training and experience while physical capital does not appreciate their value
  3. Physical capital is tangible, i.e. it can be seen and touched. Unlike human capital is intangible that can only be experienced.
  4. Human capital is acquired through formal education, job training, on the job learning and life experiences, whereas physical capital can be acquired through direct purchases or lease.
  5. Human capital can depreciate through bad health and poor training, whereas physical capital can depreciate due to ageing and not by bad health.
  6. Human capital is inseparable from its possessor. On the other hand, physical can be separated from its owner easily.

Characteristics of Human Capital

  1. Skills, qualifications and Education:The productivity of workers is closely tied to their skills, education, and qualifications.
  2. Work experience:The more experienced employees are, the more they create value.
  3. Social and communication skills:Human capital requires social and communication skills. Knowledge, skills and training will be of no use if they cannot communicate effectively or work well with other employees.
  4. It requires motivation:For human capital to perform efficiently and increase productivity, it must be motivated.
  5. Human controls other factors of production:Human capital controls and combines all other factors of production to make them more meaningful to the society.
  6. Human capital has initiative:Human capital can act on its initiative.

Factors that affect the efficiency of human capital

  1. Education:Basic education to improve literacy and numeracy has an important implication for the basis of human capital.
  2. Competitiveness: An economy dominated by state monopolies is likely to curtail individual creativity and entrepreneurs. An environment which encourages self-employment and the creation of business enables greater use of potential human capital in an economy.
  3. Infrastructure:The infrastructure of an economy will influence human capital. Good transport, communication, availability of mobile phones and the internet are very important for the development of human capital.
  4. Vocational training:Direct training for skills related to jobs, electrician, plumbing, nursing. A skilled professional requires particular vocational training.
  5. Health status:Good health status promotes better human capital whereas poor health status does not.

6 Experience: Experience is very important for human capital to be efficient.

Brain Drain and its effect on Nigeria Economy

Brain drain also called Human capital flight can be described as the migration of educated and skilled labour from poorer to richer countries. In other words, human capital flight is the loss of talented or trained persons from a country that invested in them to another country which benefits from their arrival without investing in them.

Effect of brain drain on the Nigeria Economy

When brain drain is prevalent in a developing country there may be some negative repercussions that can affect the economy. These effects include but not limited to:

  1. Loss of tax revenue to the Nigerian government.
  2. Loss of potential future entrepreneurs.
  3. A shortage of important skilled workers. This may lead to loss of confidence in the economy which will cause persons to desire to leave rather than stay.
  4. Loss of innovative ideas
  5. Loss of the country’s investment in education.
  6. The loss of critical health and education services.

Brain drain is usually described as a problem that needs to be solved. However, some benefits can be derived from the phenomena. When people move from developing countries to developed countries, they learn new skills and expertise, which they can utilize to the advantage of the home economy once they return. Another benefit is remittances; the migrants send the money they earn back to the home country, which can help to stimulate the home country’s economy.

Recommended:  Physics Lesson Note for SS1 (First Term) - PDF 2023/2024 Academic Session

How to arrest brain drain

The drawbacks of brain drain outweigh the benefits, so there are some moves that governments can make to reduce the number of highly educated and skilled workers that relocate to other countries. If we want to arrest brain drain the following should be done:

  1. Provision of better job opportunities:Better job opportunities have to be provided irrespective of tribe, belief, race or nationality.
  2. Provision of attractive salaries:Government should provide attractive salaries to highly qualified people based on their qualifications and experience.
  3. Improve on the universities:There should be a proper improvement on the quality of our universities and bring them at par with other universities in Europe and America.
  4. Improvement on power supply:The country is having constant poor power supply.
  5. Protect the lives of your citizens:The country is not safe with Boko Haram activities and kidnapping everywhere.
  6. Eradication of tribalism, nepotism and corruption:All sentiments must be discarded.


Petroleum and the Nigeria Economy

Performance Objectives

Student should be able to:

  1. State the growth of the petroleum industry in Nigeria.
  2. Discuss adequately the impact (positive and negative) of petroleum on the Nigeria economy
  3. Explain the role of N.N.P.C AND OPEC in the production and marketing of petroleum products.


The advent of the oil industry can be traced back to 1908, when a German entity, the Nigerian Bitumen Corporation, commenced exploration activities in the Araromi area, West of Nigeria. These pioneering efforts ended abruptly with the outbreak of the First World War in 1914.

Oil prospecting efforts resumed in 1937, when Shell D’Arcy (the forerunner of Shell Petroleum Development Company of Nigeria) was awarded the sole concessionary rights covering the whole territory of Nigeria. Their activities were also interrupted by the Second World War, but resumed in 1947. Concerted efforts after several years and an investment of over N30 million, led to the first commercial discovery in 1956 at Oloibiri in the Niger Delta.

This discovery opened up the Oil industry in 1961, bringing in Mobil, Agip, Safrap (now Elf), Tenneco and Amoseas (Texaco and Chevron respectively) to join the exploration efforts both in the onshore and areas of Nigeria. This development was enhanced by the extension of the concessionary rights previously a monopoly of Shell, to the newcomers. The objective of the government in doing this was to the pace of exploration and production of Petroleum. Even now more companies, both foreign and indigenous have won concessionary rights and are producing. Actual oil production and export from the Oloibiri field in present-day Bayelsa State commenced in 1958 with an initial production rate of 5,100 barrels of crude oil per day. Subsequently, the quantity doubled the following year and progressively as more players came onto the oil scene, the production rose to 2.0 million barrels per day in 1972 and a peaking at 2.4 million barrels per day in 1979. Nigeria thereafter attained the status of a major oil producer, ranking 7th in the world in 1972, and has since grown to become the sixth-largest oil-producing country in the world.

Contributions of petroleum to the Nigerian economy

Positive Contributions of petroleum to the Nigerian Economy:

  1. Source of government revenue:Petroleum has contributed greatly to the major source of revenue available to the government.
  2. Infrastructural development:Money generated from the petroleum industry has helped developed infrastructures in the country.
  3. Generation of employment:The petroleum industry has aided the creation of job opportunity for citizens of the country.
  4. Improvement of balance of payment:The exportation of petroleum to foreign countries has contributed greatly to the improvement of balance of payment
  5. Major source of energy:Petroleum remains the major source of energy in the country. e.g. petrol, diesel and kerosene.

Negative Contributions of petroleum to the Nigerian economy

  1. Environmental pollution:Oil exploration has led to serious environmental pollution of the land, air and water, especially in the Niger Delta region of the country.
  2. Development of mono-economy:As a result of the discovery of oil, Nigeria is now a mono economic country, i.e. it now relies solely on crude oil as her major source of revenue.
  3. Neglect of agricultural and other sectors:Agriculture, which used to be a major source of revenue to the nation, has been neglected. Other sectors no longer have relevance in the economy of Nigeria.
  4. Rural-urban migration:It has also led to the movement of able-bodied men and woman from rural to urban centre in search of nonexistent jobs.
  5. Political instability:The discovery of crude oil has led to political instability in the country.
  6. Economic instability:Crude oil price can collapse any time which can spell doom for the nation.

The Nigerian National Petroleum Corporation (N.N.P.C)

The Nigerian National Petroleum Corporation (NNPC) is the state oil corporation which was established on April 1, 1977. In addition to its exploration activities, the Corporation was given powers and operational interests in refining, petrochemicals and products transportation as well as marketing. Between 1978 and 1989, NNPC constructed refineries in Warri, Kaduna and Port Harcourt and took over the 35,000-barrel Shell Refinery established in Port Harcourt in 1965.

In 1988, the NNPC was commercialized into 12 strategic business units, covering the entire spectrum of oil industry operations: exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.

The roles of Nigerian National Petroleum Corporation (N.N.P.C) in the Exploration, Production, Refining, Marketing and Distribution of petroleum products.

  1. Exploration of oil: NNPC is charged with the responsibility of oil exploration in the country. They have the authority to search for the presence of oil in any part of the country.
  2. Petroleum refining:The NNPC is charged with the responsibility of supervising the refining of petroleum to get its products like petrol, diesel and kerosene.
  3. Regulatory functions:The NNPC was set up to regulate the activities of the oil company in Nigeria, e.g. issuance of licenses for oil exploration, oil prospecting and operation of filling stations.
  4. Petroleum production:The NNPC is responsible for the sinking and controlling of its oil well to produce crude oil.
  5. Marketing petroleum products: The organ is the cooperation responsible for the distribution and marketing of petroleum products.
  6. Oil policy implementation:The NNPC is also an organ through which the government implements its oil policies.

Organization of petroleum exporting countries (OPEC)

The Organization of the Petroleum Exporting Countries (OPEC) is a group consisting of 14 of the world’s major oil-exporting nations. OPEC was founded in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil to set the price of oil on the world market, to avoid fluctuations that might affect the economies of both producing and purchasing countries. Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela (the five founders), plus the United Arab Emirates, Libya, Algeria, Nigeria, Gabon, Ecuador, Indonesia, Libya, Qatar. The organization’s secretariat is in Vienna, Austria.

The roles of Organization of petroleum exporting countries (OPEC) in the Exploration, Production, Refining, Marketing and Distribution of petroleum products.

  1. To coordinate & unify the petroleum policies of member countries and to determine the best means for safeguarding their individual and collective interests;
  2. To seek ways and means of ensuring the stabilization of prices in international oil markets to eliminate harmful and unnecessary fluctuations; and
  3. To provide an efficient economic and regular supply of petroleum to consuming nations and a fair return on capital to those investing in the petroleum industry
  4. It fixes and allocates production quota to member nations.
  5. Encouragement of member nations to participate in the oil exploration.


Manufacturing and Construction

Performance Objectives

Student should be able to:

  1. Define manufacturing and Construction.
  2. List the types of manufacturing activities.
  3. List the contributions of the manufacturing industry to economic development
  4. List the contributions of the construction industry to economic development.


Manufacturing is concerned with the activities of those who engaged in processing and turning raw materials produced in the primary industry into finished products. The raw materials or natural resources are transformed into finished products after going through different processes to add value and utility. Examples of manufacturing industries are shoemaking, food processing, plastic processing and textile processing.

Construction industry is concerned with all the activities of those who engage in assembling of goods into a useable form. They convert manufactured products into various uses. Examples of construction industries are: Road construction, Building construction, Airport construction, Bridge construction, Furniture construction.

Types of manufacturing

  1. Textile manufacturing:This is based on the conversion of fibre into yarn, yarn into fabric. These are then dyed or printed, fabricated into clothes.
  2. Food processing industry:Food processing is an example of light industry, although food processing can take place on a large scale. It involves the processing of raw materials into foodstuffs, food preservation and food packaging.
  3. Chemical manufacturing:This involves the transforming of biological and chemical materials into something new or separating into parts.
  4. Metal manufacturing:This type of manufacturing industries includes both primary and fabricated metal products. The process includes various stages such as metal cut, bending, assembling and so on.
  5. Furniture and wood products:This is big manufacturing that works with wood and lumber to produce new products usually get raw materials from tree branches, logs and trunks.

Contribution/ Roles of the manufacturing and construction in economic development

  1. Increase in Gross Domestic Product (GDP):The manufacturing and construction industry through its operations like payment of taxes increases the earnings accruing to the nation.
  2. International trade improves trade balance:Most of the products of manufacturing industries like machinery are usually from western nations. This forms the basis for international trade and it improves trade balance between countries.
  3. Employment opportunities:The manufacturing and construction industries help in the generation of employment for citizens.
  4. Infrastructural development:the establishment of an industry in a place stimulates the development of infrastructure like road, telephone, electricity and pipe-borne water.
  5. Stimulation of other sectors:Industrial sector stimulate the growth of other sectors like agriculture, mining and lumbering.
  6. Diversification of the economy:The industrial sector helps different countries to prevent over-dependence on only one product like present Nigeria’s dependence on crude oil.
  7. Funding of education and research:The industrial sector provides capital for the funding of education and research work in all nations.



First Term Mid-Term Assessment

Top of Form

  1. What country is one of the Asian Tigers?




North Korea


  1. One of the factors that accounted for the rapid development of the Asian tigers include the following excerpt


High savings rate

Abundance of labour

Presence of abundance of natural resources

None of the above

  1. Japan is the ______ largest economy in the world






  1. Which economy was not among the four Asian tigers of the 1980s?


South Korea




  1. Singapore does not have an open and corruption-free environment




  1. Singapore was founded as a _______ trading colony in 1819






  1. Lessons for the Nigerian economy from the Asian Tigers include the following except


Strengthening the development of agriculture

Formulation and implementation of deliberate government policies

Discouraging industrial development

Development human capital

  1. One of the challenges facing SMEs in Nigeria is


Good infrastructure

Assess to loan

Inadequate power supply

Human capital development

  1. One of the factors that accounted for the rapid development of the asian tigers include the following excerpt


High savings rate

Abundance of labour

Presence of abundance of natural resources

None of the above

  1. South Korea and Taiwan are good technological hub




  1. All non-human assets created by humans and used in the production and manufacturing process.


Human capital

Labour force

Physical capital

Brain drain

  1. Which of the following is not an importance of human capital


Operation of machines

It hinders productivity

It ensure profitability

Provision of personnel

  1. The departure of individuals with technical skills or knowledge from organizations, or geographical region to another is _______


Brain drain

Human capital

Physical capital

Labour flight

  1. To arrest brain drain, governments can do any of the following excerpt


Improve on the universities

Promotion on merit

Improve power supply

Encourage tribalism and nepotism

  1. _______ refers to the value that is added onto a company by an employee which can be measured by the employee’s skill and competencies


Human capital

Labour Force

Physical capital

Human capital flight.

  1. The petroleum industry in Nigeria is an example of a


Capital-intensive industry

Service industry

Labour-intensive industry

Tertiary production industry

  1. The Organization of Petroleum Exporting Countries (OPEC) is a





  1. Which of the following is not an objective of the Organization of Petroleum Exporting Countries (OPEC)?

Stabilization of oil prices

Coordinating prices

Harmonizing oil prices

Stagnation of developed economies

  1. The Nigerian National Petroleum Corporation (NNPC) was established in what year






  1. Which of the following is a positive contribution of petroleum to Nigerian economy?


Environmental pollution

High rate of inflation

Economic instability

Generation of employment

  1. ______ refer to the turning of raw materials onto new products by mechanical or chemical processes in the factory


Construction industry

Manufacturing industry

Labour intensive

Capital intensive

  1. . An industry that is concerned with all the activities of those who engage in assembling of goods manufactured into useable form


Construction industry

Manufacturing industry

Labour intensive

Capital intensive

  1. Which of the following is not a contribution of the industrial sector to the Nigerian economy?

Diversification of the economy

Man power development

Increase in gross domestic product

Reduction in government revenue

  1. The manufacturing industry belong to primary industry




  1. . Which of the following is not a problem of manufacturing industries?

Insufficient capital

Shortage of raw material

Incentives to industries

Poor management

Bottom of Form


Service Industries

Performance Objectives

Student should be able to:

  1. Describe economic services.
  2. State types of economics services.
  3. List the roles of the service industry to economic development


The service industries involve the provision of services to business as well as to the final consumers. The service industry renders services to the people. A service involves doing something for consumers, which could be personal or indirect services. The people pay directly or indirectly.

Type of service industries

  1. Banking:This includes people who assist others to have money for their daily needs. They also provide capital for those embarking on industrial activities and saving facilities.
  2. Insurance:Insurance is concerned with the activities of people who undertake to protect individuals or businesses against risk in their day to day operation. These people are insurance brokers, underwriters and agents.
  3. Advertising:This involves the business of providing information about the existence of a product to the potential buyers.
  4. Transportation:This is concerned with the movement of goods and services to where they are needed. Those who engage in these services are drivers, pilots and sailors.
  5. Warehousing:The people involved are warehouse managers, clerks etc. They are concerned with ensuring that goods produced are stored until they are for consumption.
  6. Tourism:This is concerned with all the activities of those who engage in creating tourist attractions in different tourist centres.
  7. Trading:This is concerned with the activities of all people who engage in the act of buying and selling of goods and services.
  8. Communication: This includes all the activities which promote rapid transmission of messages between senders and receivers or from one place to another.
Recommended:  7 Best Paraphrasing Tools for Thesis and Academic Writing (2023)

Role/ Contributions of the service industries to economic development

  1. Aids to Trade:Service industries through banking, warehousing and transportation do assist in enhancing trading in the economy of the nation.
  2. Generation of revenue: Service industry generates revenue both for the government through tax and the people who are engaged in the industry.
  3. Generation of employment:The service industry through all activities in trading, banking, transportation, communication helps to generate employment for the people.
  4. Stimulate other sectors:The service industry does stimulate the growth of other sectors like the manufacturing and construction industries.
  5. Diversification of the economy:The service industry also helps in the diversification of the economy through its branches like tourism.
  6. Manpower development:Many people are trained in different areas e.g. Doctors, Lawyers, Musicians, Teachers, Police and Army.


Agencies that regulate the financial markets

Performance Objectives

Student should be able to:

  1. Identify regulatory agencies.
  2. State the aspect of the market regulated by each agency.


Meaning and types of regulatory agencies

Regulatory agencies of financial institutions are agencies set up by the government to regulate the activities of financial markets such as money market, capital market and stock exchange.

Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. This may be handled by either a government or non- government organization.

Aims of regulation

  1. To maintain confidence in the financial system
  2. Contributing to the protection and enhancement of stability of the financial system.
  3. Securing the appropriate degree of protection for consumers.
  4. Reducing the extent to which a regulated business can be used for a purpose connected with financial crime.
  5. Financial regulators ensure that listed companies and market participants comply with various regulations under the trading acts.
  6. They supervise the stock exchanges through exchange acts ensure that trading on the exchange is conducted properly.

The major agencies established to regulate these financial markets are the central banks of Nigeria (CBN), the Nigerian Deposit Insurance Corporation (NDIC) and the Security and Exchange Commission (SEC).

Regulation of Money market, Agencies of the money market and their roles

The money market refers to a market for short term loan. The market constitutes individuals and institutions that either have money to lend or wish to borrow on a short term basis. Federal and state governments have a myriad of agencies in place that regulate and oversee financial market and companies. These agencies each have a specific range of duties and responsibilities that enable them to act independently of each other while they work to accomplish similar objectives. The objectives of monitoring or regulation is to ensure compliance by listed companies with their disclosure requirement to ensure that investors have access to essential and adequate information for making an informed assessment of listed companies and their securities.

Agencies that regulate the money market in Nigeria are:

  1. The central bank of Nigeria:Central bank is the highest financial institution in a country which carries out the monetary policy of the government. It is the sole authority in the banking industry which acts as banker to the government and the commercial banks. Central banks controls and regulates the supply of money.
  2. Nigerian Deposit Insurance Company:The role of the NDIC is to administer the deposit insurance system (DIS) in Nigeria and protect depositors. The cooperation provides incentives for sound risk management in the Nigerian banking system, promotes as well as contributes to the stability of the financial system. The NDIC complements the regulatory and supervisory role of the central bank of Nigeria (CBN), although it reports to the federal ministry of finance.
  3. Financial Industry Regulatory Authority (FINRA):FINRA represents and regulates all stock and bond brokerage firms and their employees.

Regulation of Capital market, Agencies of capital market, objectives and tools

Capital market is a market for medium-term and long term loans. It comprises all the institutions which are concerned with either the supply of or demand for long term capital. Some of the agencies that regulate the capital market are:

  1. The central bank of Nigeria:Central bank is the highest financial institution in a country which carries out the monetary policy of the government. It is the sole authority in the banking industry which acts as banker to the government and the commercial banks. Central banks controls and regulates the supply of money.
  2. Nigerian Deposit Insurance Company:The role of the NDIC is to administer the deposit insurance system (DIS) in Nigeria and protect depositors. The cooperation provides incentives for sound risk management in the Nigerian banking system, promotes as well as contributes to the stability of the financial system. The NDIC complements the regulatory and supervisory role of the central bank of Nigeria (CBN), although it reports to the federal ministry of finance.
  3. The Securities and Exchange Commission:The security and exchange commission (SEC) is the regulatory apex organization of the Nigerian capital market. Security and exchange commission was established in 1979. The primary aim of the commission is to protect investors and maintain the integrity of the securities markets including primary and secondary market.

Instruments used in capital market

  1. Debt instrument
  2. Equities (also called common stock)

iii. Preference Shares.

  1. Derivatives.


Functions and Roles of Regulatory Agencies

Performance Objectives

Student should be able to:

  1. Explain the functions of CBN, NDIC, SEC, etc.
  2. Demonstrate knowledge of their evolution.


Functions of Central bank of Nigeria (CBN)

Central bank is the highest financial institution in a country which carries out the monetary policy of the government. It is the sole authority in the banking industry which acts as banker to the government and the commercial banks. Central banks controls and regulates the supply of money. The function of the central bank includes the following:

  1. Banker to the government: Central bank is an agent and banker to the government. It controls the public account, receives revenue on behalf of the government and makes payment from this account.
  2. Foreign Exchange transaction:The central bank holds the foreign reserve of a country, and this helps in enforcing foreign exchange control, which is set up to purchase and sell foreign currencies.
  3. Management of national debt: Thecentral bank is responsible for the management of national debt of the country.
  4. 4.Responsible for monetary policy:The central bank is responsible for the monetary policies of the country.
  5. Formulation of rules and regulations guiding the banking industry:The central bank controls, regulate and supervises other components of the banking system.

Functions of the Nigerian Deposit Insurance Company

Section 2 of the Nigeria Deposit Insurance Corporation Act 2006 stipulates the functions for the corporation as follows:

  1. Ensuringall deposit liabilities of licensed banks:Such other financial institutions (hereinafter referred to as “insured institutions”) operating in Nigeria within the meaning of sections 16 and 20 of this Act to engender confidence in the Nigerian banking system.
  2. Assisting:To insured institutions in the interest of depositors, in case of imminent or actual financial difficulties of banks particularly where suspension of payments is threatened, and avoiding damage to public confidence in the banking system.
  3. Guaranteeing payments to depositors:In case of imminent or actual suspension of payments by insured institutions up to the maximum as provided for in section 20 of this Act.
  4. Assisting monetary authorities:In the formulation and implementation of policies to ensure sound banking practice and fair competition among insured institutions in the country
  5. Pursuing any other measures:Necessary to achieve the functions of the corporation provided such measures and actions are not repugnant to the objects of the corporation.

Functions of the Securities and Exchange Commission

The major functions of the Securities and Exchange Commission are as follows:

  1. To control the stock exchange or any other security market business.
  2. To register any type of joint-stock scheme including mutual fund and monitor and control them.
  3. To develop, monitor and control security markets all authorized and self- controlled bodies/organizations.
  4. To develop investment-related knowledge and to arrange for training facilities for persons involved with the security market.
  5. To inspect security dealers, issuer and stock exchange and ask to provide information, investigation and conduct audit.
  6. To analyze, discuss and conduct research any activity related with security.
  7. To disclose and preserve any information and data related with security market. These are the functions of the SEC to develop the share market and protect the interest of the shareholders.




International Trade

Performance Objectives

Student should be able to:

  1. Explain how domestic trade differs from international trade.
  2. Discuss comparative cost theory.
  3. Explain the limitations of comparative cost theory.


International trade also known as foreign trade or external trade is the exchange of goods and services between countries. Trading globally allows consumers and countries to be exposed to goods and services not available in their own countries, or which would be more expensive domestically. The importance of international trade was recognized early on by political economists like Adam Smith and David Ricardo.

According to David Ricardo, the country should specialize in the production of goods and services for which it has a cost advantage over another country. This he pointed out will bring about the production of goods at a cheaper cost.

Types of International trade

There are two major types of international trade. These are:

  1. Bilateral international trade:This is a trade agreement in which two countries exchange goods and services.
  2. Multilateral international trade:This is a type of international trade in which a country trades with many other countries. E.g. Nigeria trades with the USA, Britain and Japan.

Internal Trade

Internal trade, also known as domestic tare of home trade involves the exchange of foods and services among the people within a particular country. The items of internal trade include those goods and services which are produced and sold internally or locally.

Differences between international trade and internal trade

  1. Immobility of Factors of Production:Labour and capital do not move freely from one country to another as they do within the same country. On the contrary, between regions within the same political boundaries, people distribute themselves more or less according to opportunities.

2. Different Currencies: Each country has a different currency. India for instance, has the rupee, the U.S.A. the dollar, Germany the mark, Italy the lira, Spain the peso, Japan the yen, and so on. Hence, buying and selling between nations give rise to complications absent in internal trade.

3. Restrictions on Trade: Trade between different countries is not free. Very often there are restrictions imposed by custom duties, exchange restrictions, fixed quotas or other tariff barriers. For example, our own country has imposed heavy duties on import of motor cars, wines and liquors and other luxury goods.

4. Ignorance: Knowledge of other countries cannot be as exact and full as of one’s own country. Differences in culture, language and religion stand in the way of free communication between different countries. On the other hand, within the borders of a country, labour and capital freely move about. These factors, too, make internal trade different from international trade.

Reasons or basis for international trade

  1. Reduced dependence on your local market:Your home market may be struggling due to economic pressures, but if you go global, you will have immediate access to a practically unlimited range of customers in areas where there is more money available to spend, and because different cultures have different wants and needs, you can diversify your product range to take advantage of these differences.
  2. Increased chances of success:Unless you’ve got your pricing wrong, the higher the volume of products you sell, the more profit you make, and overseas trade is an obvious way to increase sales.  In support of this, UK Trade and Investment (UKTI) claim that companies who go global are 12% more likely to survive and excel than those who choose not to export.
  3. Increased efficiency:Benefit from the economies of scale that the export of your goods can bring – go global and profitably use up any excess capacity in your business, smoothing the load and avoiding the seasonal peaks and troughs that are the bane of the production manager’s life.
  4. Increased productivity:Statistics from UK Trade and Investment (UKTI) state that companies involved in overseas trade can improve their productivity by 34% – imagine that, over a third more with no increase in plant.
  5. Economic advantage:Take advantage of currency fluctuations – export when the value of the pound sterling is low against other currencies, and reap the very real benefits.  Words of warning though; watch out for import tariffs in the country you are exporting to, and keep an eye on the value of sterling.  You don’t want to be caught out by any sudden upsurge in the value of the pound, or you could lose all the profit you have worked so hard to gain.
  6. Innovation:Because you are exporting to a wider range of customers, you will also gain a wider range of feedback about your products, and this can lead to real benefits.  UKTI statistics show that businesses believe that exporting leads to innovation – increases in break-through product development to solve problems and meet the needs of the wider customer base.  53% of businesses they spoke to said that a new product or service has evolved because of their overseas trade.
  7. Growth:The holy grail for any business, and something that has been lacking for a long time in our manufacturing industries – more overseas trade = increased growth opportunities, to benefit both your business and our economy as a whole

The principle of comparative cost advantage

Comparative advantage occurs when one country can produce a good or service at a lower opportunity cost than another. This means a country can produce a good relatively cheaper than other countries

The theory of comparative advantage states that if countries specialize in producing goods where they have a lower opportunity cost – then there will be an increase in economic welfare.

Theory of Comparative Advantage

Comparative advantage was first described by David Ricardo in his 1817 book “On the Principles of Political Economy and Taxation” He used an example involving England and Portugal. Ricardo noted Portugal could produce both wine and cloth with less labour than England.

Recommended:  FGGC Bakori School Fees For New Students (JSS1 & SSS1) 2023/2024 Session

However, England was relatively better at producing cloth. Therefore, it made sense for England to export cloth and import wine from Portugal.

Example of Comparative Advantage

  1. Assume two countries, UK and India
  2. They both produce textiles and books.

iii. Their relative production levels are shown in the table below.

Output without trade




  1. For the UK to produce 1 unit of textiles it has an opportunity cost of 4 books.
  2. However for India to produce 1 unit of textiles it has an opportunity cost of 1.5 books

iii. Therefore India has a comparative advantage in producing textiles because it has a lower opportunity cost.

  1. The UK has a comparative advantage in producing books. This is because it has a lower opportunity cost of 0.25 (1/4) compared to India’s 0.66 (2/3)

Specialization and trade

If each country now specializes in one good then, assuming constant returns to scale, output will double.

Output after trade



  1. Therefore the total output of both goods has increased – illustrating the potential gains from exploiting comparative advantage.
  2. By trading the surplus books and textiles, India and the UK can enjoy higher quantities of the goods.

There are many examples of comparative advantage in the real world e.g. Saudi Arabia and oil, New Zealand and butter, USA and Soya beans, Japan and cars e.t.c.

Criticisms of Comparative advantage

  1. Cost of trade:To export goods to India imposes transport costs.


  1. External costs of trade:Exporting goods leads to increased pollution from ‘air-freight’ and can contribute to environmental costs not included in models which only include private costs and benefits.


  1. Diminishing returns/diseconomies of scale:Specialization means a country will increase the output of one particular good. However, for some industries increasing output may lead to diminishing returns. For example, if Portugal has a comparative advantage in wine, it may run out of suitable land for growing grapes.


  1. Static comparative advantage:A developing economy, in sub-Saharan-Africa, may have a comparative advantage in producing primary products (metals, agriculture), but these products have a low-income elasticity of demand, and it can hold back an economy from diversifying into more profitable industries, such as manufacturing.


  1. Dutch disease:Dutch disease is a phenomenon where countries specialize in producing primary products (oil/natural gas) but doing this can harm the long-term performance of the economy. In the 1970s, the Netherlands specialized in producing natural gas, but this led to the neglect of manufacturing and when the gas industry declined, the economy was left behind its near neighbours.


  1. Trade – not a Pareto improvement:Trade can lead to an increase in net economic welfare. However, it doesn’t mean that everyone will become better off. Some workers in uncompetitive industries may lose out and struggle to gain employment in new industries.


  1. Complexity of global trade: Models of comparative advantage usually focus on two countries and two goods, but in the real world, there are multiple goods and countries. Increasingly there is growing demand for a variety of goods and choice – rather than competing on simple price.


International Trade (2)

Performance Objectives

Student should be able to:

  1. Explain the term of trade and discuss the instruments of foreign protection.
  2. Explain the meaning of the various forms of economic integration.
  3. Outline the trend and structure of Nigeria external trade.


Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade.

On one hand, globalization has created new jobs and economic growth through the cross-border flow of goods, capital, and labour. On the other hand, this growth and job creation is not distributed evenly across industries or countries.

Globalization has grown due to advances in transportation and communication technology. With the increased global interactions comes the growth of international trade, ideas, and culture. Globalization is primarily an economic process of interaction and integration that’s associated with social and cultural aspects. However, conflicts and diplomacy are also large parts of the history of globalization and modern globalization.

The features of Globalization

  1. World Markets:One of the key features of present-day globalization is access to the world markets. This has been made possible by globalization. Global consumers demand world-class variation and quality of products. It can provide a high-rocket speed development rate.
  2. Global products standardization:If you want to reach the markets all over the world, you will need to be able to satisfy the standards of the global market. The customers will be your judges. If the quality of your goods and services is low, you will be kicked out of the market.
  3. Sharing of ideas:Globalization provides an interesting concept of sharing ideas; this is one of its basic features. This is also how different variations of rock, pop, and rap cultures appear in the world. The fact that these ideas are worth sharing makes globalization a good accelerator for spreading them.
  4. Raising standards:Globalization does not only increase the standards and quality of products, but the quality of life itself. More and more people have increased their living standards due to global trends. The citizens of one country can see how other people live in the world and adapt the good ideas, that way they can also demand an increase in the standard of living in their countries.
  5. Freedom standards:One of the major fears of any anti-globalist is the fear of a united country or government under the rule of few; however, globalization also results in the spreading of freedom standards. This includes the freedom of speech and human rights. Nonetheless, it is still quite difficult to spread these standards all over the world because some countries oppose them; but as well all know, freedom cannot be stopped.

The advantages of globalization

Globalization brings several potential benefits to international producers and national economies, including:

  1. Providing an incentive for countries to specialize and benefit from the application of the principle of comparative advantage.
  2. Access to larger markets means that firms may experience higher demand for their products, as well as benefit from economies of scale, which leads to a reduction in average production costs.
  3. Globalization enables worldwide access to sources of cheap raw materials, and this enables firms to be cost-competitive in their markets and overseas markets. Seeking out the cheapest materials from around the world is called global sourcing.Because of cost reductions and increased revenue, globalization can generate increased profits for shareholders.
  4. Avoidance of regulation by locating production in countries with less strict regulatory regimes, such as those in many Less Developed Countries (LCDs).
  5. Globalization has led to increased flows of inward investment between countries, which have created benefits for recipient countries. These benefits include the sharing of knowledge and technology between countries.
  6. In the long term, increased trade is likely to lead to the creation of more employment in all countries that are involved.

The disadvantages of globalization

There are also several potential disadvantages of globalization, including the following:

  1. The over-standardization of products through global branding is a common criticism of globalization. For example, the majority of the world’s computers use Microsoft’s Windows operating system. Standardizing of computer operating systems and platforms creates considerable benefits, but critics argue that this leads to a lack of product diversity, as well as presentingbarriers to entry to small, local, producers.
  2. Large multinational companies can also suffer from diseconomies of scale, such as difficulties associated with coordinating the activities of subsidiaries based in several countries.
  3.  Critics of globalization also highlight the potential loss of jobs in domestic markets caused by increased, and in some cases, unfair, free trade. This view certainly accounts for some of the rise in nationalist movements in many developed economies, along with the push for increased protectionism.
  4. Globalization can also increase the pace of deindustrialization, which is the slow erosion of an economy’s manufacturing base.
  5. Jobs may be lost because of the structural changes arising from globalization. Structural changes may lead to structural unemployment and may also widen the gap between rich and poor within a country.
  6. Globalization generates winners and losers, and for this reason, it is likely to increase inequality, as richer nations benefit more than poorer ones. The awareness of rising inequality, along with job losses, has been argued to have contributed to the rise in anti-globalization movements.
  7. Increased trade associated with globalization has increased pollution and helped contribute to CO2emissions and global warming. Trade growth has also accelerated the depletion of non-renewable resources, such as oil.

The opportunities globalization presents to the Nigerian economic

The main opportunities arising from globalization for the Nigerian economy are:

1. Growth: Assuming Nigeria maintains its competitiveness, globalization is likely to increase Nigeria growth in the long term because aggregate demand (AD) is likely to increase through increased exports (X), and aggregate supply (AS) is likely to increase because of higher levels of investment, both domestic and foreign direct investment (FDI). However, growth in the short term may become more unstable as the global economy becomes increasingly interconnected. The recent credit crunch is evidence that unstable growth is a possible consequence of globalization. Some economists have also argued that globalization has increased the process of deindustrialization in the developed countries, including Nigeria.

2. Employment: Long term, jobs may be destroyed in the manufacturing sector and created in the service sector, hence creating structural employment, which could widen the income gap within countries. The net effect of the impact on employment depends upon the speed of labour market adjustment, which itself depends upon mobility and flexibility. Improvements in labour productivity may be needed to close the productivity gap.

3. Prices: Increased competition is likely to reduce the price level, for traded manufactures.  Because Nigeria firms can source from around the world costs may be held down, and this may be passed on in terms of reduced domestic and export prices.

4. Trade: The volume of both imports and exports is likely to increase, with trade representing an increasing proportion of GDP. The effect on the balance of payment is uncertain and depends upon relative growth rates, inflation, competitiveness, and the exchange rate.


Top of Form

1. _______ is concerned with the activities of people who undertake to protect individual or businesses against risk in their day-today operation





2. The provision of services to business as well as to the final consumers is the function of _______________


Construction industries

Service industries

Manufacturing industries

None of the above

3. An occupation concerned with ensuring that goods produced are stored until they are needed for consumption is ______






4. Which of the following is not a contribution of the service industry?

Economic growth

Generation of employment

National disintegration

Manpower development

5. ______ can simply be defined as all those activities involved in the distribution and exchange of goods and services




None of the above

6. An agency set up by the government to regulate the activities of the financial markets is called______

Regulatory agencies

Market regulatory

Financial regulation

None of the above

7. Which of the following is not an aim of regulation?

Financial stability

Consumer protection

Reduction of financial crime

Losing market confidence

8. The highest financial institution in a country which carries out the monetary policy of the government




None of the above

9. The regulatory apex organization of the Nigeria capital market is ______




None of the above

10. NDIC means

Nigerian deposit insurance corporations

National deposit insurance corporations

Nigerian deport insurance commission

None of the above

11. Which of the following is not an aim of regulation?

Financial stability

Losing market confidence

Consumer protection

Reduction of financial crime

12. An agency set up by the government to regulate the activities of the financial markets is called______


Regulatory agencies

Market regulatory

Financial regulation

None of the above

13. The highest financial institution in a country which carries out the monetary policy of the government




None of the above


14. NDIC means


Nigerian deposit insurance corporations

National deposit insurance corporations

Nigerian deport insurance commission

None of the above

15. The regulatory apex organization of the Nigeria capital market is ______





None of the above

16. According to Ricardo, a country will have a comparative advantage in:


Industries in which there are neither imports nor exports

Import-competing industries

Industries that sell to domestic and foreign buyers

Industries that sell to only foreign buyers

17. Which of the following is a determinant of trade?



Per capita income

Technological changed

All of the above

18. A close economy is one in which:


Imports exactly equal exports, so that trade is balanced

Domestic firms invest in industries overseas

The home economy is isolated from foreign trade

Saving exactly equals investment at full employment

19. According to Ricardo’s principle, specialization and trade increase a nation’s total output since:


Resources are directed to their highest productivity

The output of the nation’s trading partner declines

The nation can produce outside of its production possibilities curved

The problem of unemployment is eliminated

20. A main advantage in specialization results from:


The specializing country behaving as monopoly

Smaller production runs resulting in lower unit costs

Economies of large scale production

High wages paid to foreign workers

21. Amalgamation and rapid unification between countries can be identified as






22. Globalization has improved in the living structure of


All the people

Workers in developed countries

People in developed countries

None of the above

23. Globalization is a multi-dimensional process, reshaping the context of security, health control and other governmental policies just as much as their economic policies.




24. The following are some of the opportunities of globalization excerpt






25. ________ is the disparity in resources and wealth between two entities.


Economic inequality

Economic disparity

Trade inequality


Hope you got what you visited this page for? The above is the lesson note for Economics for SS3 class. However, you can download the free PDF file for record purposes.

If you have any questions as regards Economics lesson note For SS3 class, kindly send them to us via the comment section below and we shall respond accordingly as usual.

error: Schoolings is protecting this content !!