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FORM 2 Notes






Trade is the exchange of goods or services for money or other commodities for mutual benefits. It is basically the buying and selling of goods.

Trade originated during the New Stone Age. During this period, man began a settled lifestyle. He became specialised in various activities such as weaving, pottery and livestock keeping. This specialisation made some people to produce certain items which others did not produce. The need of satisfying various essential material needs therefore led to emergence of trade.


Methods of Trade


Barter trade and currency trade are the two existing forms of trade in the world.


Barter trade.

Barter trade is the oldest method of trade in the world. It existed even during the Old Testament time. Barter trade exists even today. This occurs when people exchange goods for other goods. In this case no established medium of exchange is used. In certain occasions, services are exchanged for goods. The goods may also be exchanged for services.

Barter system was very popular before the introduction of money. For instance a cow could be exchanged for a number of goats. A basket of millet could be exchanged for a basket of maize or beans.

The people of ancient Ghana exchanged their gold with the people of North Africa for salt.

This form of trade did not succeed very well where there was language barrier. Barter trade exists even today. In Kenya, certain commodities e.g. agricultural products are exchanged for machinery and oil.


Advantages of barter trade were:

  1. There was direct exchange of goods or services for goods.
  2. It encouraged people who were exchanging goods for goods to get involved in actual production of the items. This kept the communities busy.
  3. Barter trade enabled people who had no goods for exchange to acquire goods they wanted by merely rendering services to those who had.
  4. It enabled people to acquire the goods they did not produce themselves.


Disadvantages of barter trade were:


  1. Barter trade was not very convenient because sometimes people could not acquire the commodities they intended to exchange their goods for. For example one may have intended to exchange a bag of maize with a bag of millet just to find that there was no millet in the market.
  2. The method was tiresome because all those who wanted to exchange goods had to carry those goods to the market sometimes for long distances.
  3. Since in normal trade there is a buyer and a seller, it became difficult to specify who the buyer or seller was because both were just exchanging items and there was no specific buyer or seller.
  4. It was difficult to transport bulky goods to the market.
  5. It was difficult to value goods being exchanged to ensure that the deal was fair for both parties exchanging items.
  6. Barter trade was not very successful where the people exchanging goods had no common language to ease communication.
  7. It was not easy to exchange certain items such as a bull or a donkey because if the other party did not have sufficient goods for exchange, a bull or a donkey could not be split into smaller units to match with the goods available.


The Currency trade

This method of trade involves the use of money as a medium of exchange. The medium of exchange must be acceptable and convenient to people.

Money may be used to purchase commodities or to pay for services. Money is also used a measure of value. Today, people value their property in terms of money. Objects which have ever been used as money before the introduction of modern currencies are cowrie shells, iron bars, bronze, salt, gold and silver.


The major world currencies are:


i)  US Dollar

  1. German Deutsche Mark
  2. British Sterling Pound
  3. French Franc
  4. Canadian Dollar
  5. Mexican Peso
  6. Japanese Yen
  7. European Union Euro


Advantages of currency trade are

  1. It is easy to carry money when going to buy items because it is not heavy.
  2. Money can be split into smaller units which enables people to purchase any quantity of goods in the market.
  3. Items are valued easily in terms of Shillings, Dollars, Yen, Pound Sterling, etc. This makes the buyer to have an idea of the value of various items in advance.
  4. Currency trade brings about clear definitions of the terms buyer or seller. In this case the buyer is the one who gives out money to acquire goods while the seller is the one who gives out goods to acquire money.
  5. When one receives money for goods delivered or sold, he can save it in banks or store it without fear of any damage such as decay for a long time.


Disadvantages of currency as a medium of exchange are


i)  Currency can easily loose value (purchasing power) as it happened in Uganda during the era of President Idi Amin.

  1. If there are no goods available for buying, money becomes useless. Many a times people have starved almost to death during famine due to shortage of food to buy with the money they have.
  2. Use of currency in business has encouraged robbery, pickpocketting and many other forms of crime.


Types of trade

There are three types of trade namely: local trade, regional trade and international trade.


Local Trade

Local trade is the exchange of goods within the same community at the village level. It may also involve the neighbouring communities or people who share a common boundary.

People who conducted local trade established markets on the community boundaries or in a central place where people from a number of villages met to exchange goods. People exchanged goods they had for the things they did not have. This type of trade exists in Kenya even today where local county councils have established markets in certain trading centres. Local trade covers a small area.


 The origin of local trade

Local trade originated from the time early man began a settled lifestyle. It was facilitated by the need to acquire what one did not have from those who had. The environmental differences also contributed the emergence of this type of trade.


 The development of local trade

Local trade developed as human population increased. The increase in population led to demand for various items such as food, clothing, pots and ornaments. Some people became specialised in making iron tools, others in making items such as pots, baskets and bark-cloth while others became pastoralists and kept cattle, sheep and goats.

The blacksmith obtained meat from the pastoralists and grains from the cultivators. The pastoralists needed knives and spears from the blacksmiths. The cultivators needed iron hoes; knives for harvesting; millet, sorghum and axes for clearing fields for cultivation. The demand for goods therefore encouraged local trade to develop and markets were established where people met to buy and sell things.


 The organisation of local trade

People established markets at the most convenient places for all. They set market days when they would meet to exchange goods. At the beginning, the form of trade was mainly barter. Later there was introduction of money (currency) which acted as a medium of exchange.

During this trade, people transported their commodities on their heads and backs. Some communities such as the Maasai used donkeys to carry their goods to the markets while the Somali and the Boran used camels.

People who traded were provided with security by local leaders.

Some established local merchants bought the items and resold them to other traders far away beyond the local boundaries. For example ivory was sometimes bought from the local markets in Samburu and Baringo and then transported to the coast where it was bought and shipped to Asia.


 The impact of the local trade

Local trade led to intermarriages between people of different villages and people of neighbouring communities.

It contributed to the unity of family members who constituted a community. This is because the interaction of people in the markets united them. Local trade enabled people to acquire what they did not have from those who had.

It laid the basis for other types of trade such as the regional and the international trade because some of the goods sold at regional and international levels were bought from local markets by the traders and eventually sold far away from the sources.

Local trade enabled some people such as Chief Kivoi of Ukambani to acquire skills in trade thereafter becoming experienced long distance traders. Where members of one community traded with members of another community there was development of languages through word borrowing as well as cultural exchange.

In this case members of each community would borrow some cultural practices which became known to them as they interacted in the markets.



Regional Trade

Regional trade is the exchange of goods within a specified part of a continent or region. It can be trade between different communities in a region who are living apart.

This trade involves a bigger geographical area than the one covered by local trade. It also involves more traders. An example of regional trade is the Trans-Saharan trade.


 The origin of the Trans-Saharan trade

It is not known exactly the time this trade started but it was going on between 1000AD and 1500AD. The people of West Africa and those from North Africa exchanged goods from very early times even before the Sahara dried up into a desert. The desert trade was later revolutionised by the introduction of the camel in the first century AD.


 The development of the Trans-Saharan trade

The Trans-Saharan trade began developing after the introduction of the camel which replaced the use of oxen and horses which were used by traders before the Sahara turned into a desert.

The people involved in this trade were the local inhabitants of West Africa such as the people of ancient Ghana, Mali and Songhai. There were also desert communities like the Tuaregs, the Berbers and the Arabs from North Africa. Later Europeans and Jewish traders who had settled along the North African coast became engaged in this lucrative trade.

The people of West Africa (Western Sudan) sold Gold, ivory, slaves, gum, ostrich feathers, colanuts and hides and skins to the people of North Africa and in return obtained horses, silk cloth, beads, cotton cloth, spices, mirrors, needles, dried fruits and salt from the North African traders. The salt sold was obtained from Targhaza, Taodeni and Ghadames while the gold brought for sale was obtained from Wangara, Bure and Budu mines.

The main trade routes were that which connected Fez and Sijilmasa in Morocco with Audaghost in West Africa and passed through Targhaza. The other started from Tunis in Tunisia through Ghadames, Ghat and Agades in the Sahara desert to Hausaland. Another one ran from Sijilmasa through Tuat, Gao and reached Timbuktu. The other one started from Tripoli and went past Fezzan to Bornu via Bilma. There were several other minor ones which made the trade routes to resemble a cobweb. All these routes touched the salt mines in the desert as salt was a commodity of trade very much needed by the people of western Sudan.















Some Trans-Saharan trade routes and sources of goods

The Trans-Saharan trade developed due to the following reasons:

  1. The trade commodities which the traders from both sides demanded were available.
  2. The trade goods themselves were in great demand. For instance the people of West Africa demanded salt while the people of North Africa demanded gold.
  3. The West African rulers provided the traders with security.
  4. The desert Tuaregs guided traders; provided them with water, food and accommodation; showed traders direction; acted as interpreters; provided traders with security while crossing the desert and cared for the oasis where traders obtained water.
  5. There were established trade routes in the desert which provided considerable transport and communication services to traders.
  6. There were enterprising professional merchants who conducted trade across the desert.
  7. There were means of transport provided by use of camels, horses and donkeys.
  8. There was sufficient capital to finance trade.
  9. The local trade which existed in North Africa and West Africa laid the basis for the Trans-Saharan trade.


The development of the Trans-Saharan trade was hampered by some of the obstacles traders encountered as they conducted their business across the desert. Some of these obstacles were:

  1. Traders lost direction in the desert.
  2. They were attacked by desert robbers. This occurred when the Tuaregs changed their role of guides to that of robbers.
  3. vggbThe traders were affected by numerous sandstorms which blocked the routes they followed.


  1. The trades were also affected by weather variations because sometimes it became too hot and at other times too cold.


  1. The distance traders travelled across the desert was too long and scaring.


  1. Traders were sometimes in danger of attacks by dangerous desert creatures such as snakes and scorpions.


  1. There was communication barrier due to lack of a common language. This made it necessary for traders to use the Tuaregs as their guides and interpreters but later they became unreliable when they began stealing goods from traders.


  1. There was lack of adequate basic needs such as food and water especially in the desert.


iii)  The organisation of the Trans-Saharan trade

The Trans-Saharan trade was conducted by the people of western Sudan and the people of North Africa. The traders from North Africa crossed the Sahara desert by use of camels. The traders travelled in large caravans some with about 1000 camels and hundreds of people for security reasons.

The Tuaregs and Berbers were recruited to act as guides (takshifs) to the traders. These guides provided the traders with security. It took about three months to cross the desert. For this reason the traders had stopping places at the oases where they bought food and water for themselves and for their camels. It is the Tuaregs who maintained the oasis and acted as interpreters. When the traders reached western Sudan, they sometimes gave their goods to the local agents on credit. The form of trade was mainly barter.

The rulers of West Africa controlled the trade and provided security to traders. In return the traders paid taxes to the rulers. The main items of trade included gold, salt, horses, hides and skins, beads and cloth. When the time to travel back to North Africa reached, the North Africa traders employed people to be left trading on their behalf. The merchants stored goods in specific gathering points which acted as distribution centres. They mainly travelled one way in a year.


The problems the Trans-Saharan traders encountered

The Trans-Saharan traders faced a lot of problems as they carried out their business. The traders travelled long distances across the Sahara desert. Their journeys were tiresome and they had insufficient food and water. Sometimes the trade goods became exhausted.

The traders were frequently interrupted by hostile desert communities who wanted to steal their goods and by dangerous sandstorms which blocked their way. Traders lost direction and they were sometimes attacked by dangerous desert creatures. There were frequent shifts of trade routes. Traders were sometimes robed by desert dwellers.


The impact of the Trans-Saharan trade

The Trans-Saharan trade had several consequences:


  1. The trade led to development of urbanisation for example towns such as Gao, Timbuktu and Jenne.


  1. The trade led to the decline of empires such as ancient Ghana and Mali while others such as Songhai emerged.


  1. Islamic religion and culture were introduced.


  1. Intermarriages between North Africans and West Africans were promoted.


  1. The Trans-Saharan trade led to a class of wealthy merchants who participated in the trade.


  1. New cultures were introduced such as eating habits and new styles of dressing.


  1. The trade led to the introduction of foreign architectural designs in West Africa.


  1. The Trans-Saharan trade contributed to the establishment and development of diplomatic ties between West Africa and North Africa.


  1. There was growth of agricultural production as a result of the introduction of new crops.


  1. The sharia laws were introduced in the administration of West Africa.


  1. The trade exposed Africa to the outside world.


  1. The trade led to the development of communication between North and West Africa.



The decline of the Trans-Saharan trade

The Trans-Saharan trade began to decline in the 15th century and disintegrated completely in the 19th century following colonisation of West Africa by the Europeans. The factors which contributed to its decline were as follows:


a)  The gold mines in western Sudan got exhausted. This discouraged traders from coming to West Africa because the main trading commodity was not available.


b)  The Morrocans invaded West Africa in the 16th century. This undermined the trade because it created anarchy and insecurity in the region. The Morrocans wanted to capture this prosperous trade.

c)  The political instability in West Africa together with the decline of empires such as Mali and Songhai increased anarchy and insecurity in the region.


d)  West Africa was invaded by the Almoravids and the Tuaregs. This further increased insecurity along the major trade routes.


e)  The Tuaregs who guided the traders changed their roles from that of guides to that of robbers.


f)  The emergence of the Trans-Atlantic trade attracted the West African traders who were formerly involved in the Trans-Saharan trade. This led to reduction of the volume of goods and traders who participated in the Trans-Saharan trade.


g)  The Turks invaded North Africa creating insecurity along the caravan routes.


h)  The colonisation of West Africa by the Europeans reduced regional links and encouraged European exploitation of West African resources therefore undermining the Trans-Saharan trade.


i)  The British anti-slave trade pressure and eventual abolition of slave trade led to decline of the Trans-Saharan trade.


j)  Rivalry between caravans and the stiff competition of the traders sometimes resulted to wars which scared traders.


  1. Moroccan ports along the Mediterranean Sea were invaded by the Spanish and Portuguese soldiers in the late 15th century and early 16th century. This disrupted trade.


  1. European merchants began penetrating into the interior of West Africa for trade. They diverted the flow of goods such that goods were later taken to the West African coastal town such as Port Elmina and Accra.


International Trade


International trade refers to trade between nations. In modern international trade, nations within the same continent are included. The international trade of the period before the mid 20th century which is our main concern involved nations particularly those in different continents and which were not part of one geographical region.

This ancient international trade developed as a result of the improvement in water transport. This was achieved mainly through the construction of strong ships and acquisition of better knowledge of navigation which enabled sailors to explore and acquire knowledge about foreign lands overseas. An example of the international trade was the Trans-Atlantic trade.


The Trans-Atlantic trade


i)  Origin

The Trans-Atlantic trade began after the Portuguese explored the West African coast in the 15th century and after the Spanish sailor, Christopher Columbus sailed to Americas.

In the 16th century the Americas became colonised by the Portuguese and the Spanish. These two nations began to open up and develop their acquired territories through mining and establishment of sugar plantations. Attempts to use the Red Indians as labourers eventually failed. There was need to import Africans to supply labour in the mines and sugar plantations. This attempt marked the beginning of the Trans-Atlantic slave trade. The increased demand for sugar, tobacco and cotton in the European countries led to the establishment and growth of more and more plantations in Americas. A lot of labourers were therefore needed to work in the growing plantations.

Africans were more suited to plantation farming because they were handy and could work effectively in hot climates. They were used to tropical diseases and could survive longer. The Africans were also used to physical strains and hardships. All these made Africans to be regarded as the most potential suppliers of labour in the American plantations.




iii)  The development of Trans-Atlantic trade

The first African slaves were the twenty people who were captured and taken to Henry the Navigator in 1442. By 1510 a large number of African slaves from Guinea were exported by the Portuguese to the Spanish colonies. Later slaves were transported directly form Guinea coast to the West Indies.

At first the Portuguese were the leading slave exporters. In the 17th century, the Dutch took the leading role as more Europeans settled in Americas and increased the demand for slave labour.

The French and the British involved themselves in this lucrative trade. The British captured the leading role from the Dutch and they dominated the Trans-Atlantic slave trade in the 18th century.

The increased demand for precious stones, sugar, cotton and tobacco in the European markets and the demand for fire arms, cloth, alcoholics, tobacco, utensils, glassware ornaments, sugar, sweets and iron bars in West Africa accelerated trade.


The Trans-Atlantic trade developed and grew rapidly due to the following factors:


1.  The commodities which were required by the Africans as well as the Europeans and Americans, were available in the three continents that took part in trade.


2.  The goods were also in great demand in the continents especially during the industrial revolution.


 3.  The West African coast had natural harbours where ships anchored.


 4.  The West African rulers provided foreign traders with security.  


5.  There existed enterprising merchants in America, Europe and West Africa who engaged in trade.


6.  The steamships provided efficient transport and communication means between the three continents.


7.  The acquisition of new knowledge of navigation enabled sailors to sail across the deep and stormy seas and oceans.


8.  The decline of the Trans-Saharan trade enabled a big volume of goods to be taken to the West African coastal markets.


iii)  The organisation of Trans-Atlantic trade


The Trans-Atlantic trade was well organised inform of a triangle which connected Europe, Africa and America. It involved European traders, African middlemen and American plantation owners.

Ships loaded with European manufactured goods such as fire arms, cloth, wines and spirits, cigarettes, iron bars, utensils, glassware, ornaments and sweets left Europe and anchored along the West African coast. Slaves captured in the interior of West Africa were marched along the coast. There were established places where the slaves were kept while awaiting shipment.
















The ships from Europe were unloaded and the European manufactured goods exchanged for slaves, colanuts, precious stones, hides and skins. The ships were once more loaded with the West African commodities which were shipped across the Atlantic ocean to Americas.

In Americas, the slaves were sold through auction. The ships were then filled with indigo, cotton, tobacco, rum, sugar, rice, timber and the precious stones like gold and silver. They were then shipped to European markets.


How the slaves were obtained during the Trans-Atlantic trade

  1. Raids were conducted for capturing slaves.


  1. Free men were kidnapped and thereafter sold as slaves.
  2. Two communities conducted wars and the one which was defeated had is people captured as slaves.


  1. Leaders sold criminals and even some of their innocent subjects.


  1. Slaves were battered with other commodities African traders required.


  1. Children and women were enticed with sweets and thereafter captured.


  1. The weaker states were forced to pay tributes imposed on them by use of slaves.


  1. The people who failed to pay debts were captured and sold as compensation. Alternatively, they surrendered a family member to be sold instead.


The impact of the Trans-Atlantic trade

1.  The Trans-Atlantic slave trade caused immense pain and suffering to innocent Africans who were captured, chained, beaten and forced to walk long distances to the West Africa coast.


2.  The trade caused an incalculable number of deaths especially during inter community wars, raids and during shipment. The death tool is estimated to be about 20 million.


3.  There was a decline in the local industries because the able bodied people were sold away leading to loss of labour and because of sale of cheap manufactured goods.


4.  There were changes in the role of chiefs who instead of protecting their people sold them as slaves.


  1. There was intensification of warfare in a bid to capture slaves. This resulted to division among and within communities which caused bitterness and disunity of the Africans. The wars between communities were accelerated by the acquisition of firearms.


6.  A class of slave merchants emerged in West Africa. Examples of the slave merchants were Jaja of Opobo and Nana of Isekri. The two were very powerful and wealthy.


7.  Some states such as Asante, Benin, Oyo and Dahomey rose to power and expanded due to the great wealth obtained from trade.


8.  The Trans-Atlantic trade led to expansion of urban centres along the West African coast where commodities were exchanged. Such towns were Whydah, Accra, Porto Novo and Badgry.


9.  To some extent some parts of West Africa where raids were conducted became depopulated. This contributed in retarding economic development in those areas.


10.  The European traders intermarried with the people of the West African coast giving rise to halfcaste (mulato).


11.  Africans developed a taste of the European goods.


12.  Some weaker kingdoms such as Ketu declined due to constant raids conducted by stronger states such as Dahomey.


13.  The Trans-Atlantic trade contributed to the decline of the Trans-Saharan trade because the goods flowing Northwards across the Sahara desert got reduced and instead were taken to the West African coastal markets.


14.  Some powerful rulers such as King Geso of Dahomey emerged as a result of the introduction of fire-arms.


15.  The trade encouraged slave raids which destroyed property. Houses and crops for instance were burnt into ashes during slave raids.


16.  The Trans-Atlantic trade led to the development of agricultural plantations in the Americas.


  1. The trade gave rise to people of African descent in Americas. These are referred to as American Negroes.


18.  The final blow as a result of this trade was that West Africa was colonised and therefore came under European control.


The decline of the Trans-Atlantic trade

The Trans-Atlantic trade declined in the 19th century because of a number of factors. The industrial revolution in USA led to use of machines to work in the farms. Slave labour was no longer necessary.

There emerged the humanitarian movement and the Christian Missionaries in Britain who considered slave trade and slavery as unjust and inhuman. A typical example of humanitarians was Sir William Wilberforce who presented the issue of slave trade and slavery to the British parliament. Dr. Livingstone also advocated slave trade to be abolished.

Some economists and scholars were of the feeling that free labour was more paying and productive than slave labour. Some of them argued that mass migration of the Africans should be discouraged to ensure retention of the markets for the European manufactured goods. The decline of plantation economy in America and the Carribeans reduced the demand for slaves for use in the farms. Also the slaves in the Carribeans and America resisted because they wanted to be left free from being enslaved.

Lastly, some Europeans felt that it was necessary to retain Africans in their motherland so that they could produce raw materials needed in the European industries. In order to achieve this, it was necessary to abolish the Trans-Atlantic slave trade which was draining Africa of its labour force.



Review Questions


1.  a)  Define the following:

i)  Barter trade

ii)  Currency trade

iii)  Local trade

iv)  Regional trade

v)  International trade

b)  Explain the advantages of using currency over barter trade.


2.  a)  Explain the origin and organisation of local trade.

b)  Discuss the factors which contributed to the development of the

Trans-Saharan trade.


3  a)  Describe the role of Takshifs during the Trans-Saharan trade.

b)  Give five trade routes traders followed during the Trans-Saharan trade.

4  a)  what problems did the traders encountered during Trans-Saharan



  1. Discuss the effects of the Trans-Saharan trade on the people of western Sudan.


5  a)  What factors contributed to the development of the Trans-Atlantic



b)  Explain the impact of the Trans-Atlantic trade under the following headings.

i)  Social impact

ii)  Economic impact

iii)  Political impact


6  Why did the Trans-Atlantic trade decline in the 19th century?



Students’ Activities


  1. Visit the nearest shopping centre and find out the problems the traders encounter as they carry out their business.


  1. Draw relevant maps indicating the trade routes during the Trans-Atlantic trade and Trans- Saharan trade.


  1. Demonstrate the methods used to obtain slaves and the way they were finally transported to the market along the West Africa Coast and sold.




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EcoleBooks | History and Government Form 2 Notes : CHAPTER 1 - Trade


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