SS3COMMERCE FIRSTTERM SCHEME OF WORK, 2022/2023

WEEKS TOPICS SUB-TOPICS/CONTENTS

1. REVISION
2. ECONOMIC GROUPINGS IN WEST Economic Community of West African States
AFRICA
i. History
ii. Objectives
iii. Achievements
iv. Problems/ obstacle
3. LAKE CHAD BASIN COMMISSION & i. Membership
MANO RIVER UNION
ii. Objective
iii. Achievements
iv. Problems/Obstacle.
4 TOURISM i. Meaning
ii. Forms
iii. Advantages and disadvantages of tourism.
iv. Tourist centers
5 INTERNATIONAL FINANCIAL International Monetary Fund (IMF) and World
INSTITUTIONS (I)
bank
i. meaning
ii. Objectives
iii. Contributions to the development of West
Africa Economy.
6 NEGOTIABLE INSTRUMENTS i. Meaning
ii. Characteristics
iii. Examples of negotiable instruments.

REVISION
 ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS)

Objectives:
 State members of Economic Communities of West African States.
 List the aims and objective of ECOWAS
 Explain the achievements and problems of ECOWAS

Meaning of ECOWAS
The treaty of ECOWAS was in signed in 1975. During 1975 and 1976, Nigeria and Togo were
assigned to work out the proposals to make the community a reality. By early 1977, under the
treaty of Lome, ECOWAS commenced operation, after the draft of protocols submitted by the
two countries got approval.

Membership
There were 15 signatories in 1975. Cape Verde joined in 1977. The members as at 2004 are:
i. Burkina Faso ii. Benin Republic
iii. Cape Verde iv. Cote d’Ivoire
v. Ghana vi. The Gambia
vii. Guinea viii. Guinea-Bissau
ix. Liberia x. Mali
xi. Niger xii. Mauritania
xiii. Nigeria xiv. Senegal
xv. Sierra Leone xvi. Togo

Aims and Objectives of ECOWAS

In its article 2, the treaty states ‘’ it shall be the aim of the community to promote co-operation
and development in all field of economic activity, particularly in the fields of industry, transport,
telecommunications, energy , agriculture, natural resources, commerce, monetary and financial
questions and in social and cultural matters for the purpose of raising the standard of living of its
people, of increasing its members and of contributing to the progress and development of the
African continent’’
The treaty proceeded to spell out in detail how these aims and objectives may be achieved in
stages:
 i. The elimination among member states of custom duties ‘’ and other exchange barriers of
equivalent effect’’ on imports and exports.
ii. The abolition of quantitative and administrative restrictions on trade among the member
states
iii. The setting up of a common tariff structure and commercial policy towards non-member
countries.
iv. The elimination between member states of the obstacles to the free movement of persons,
services and capital.
v. The harmonization of agricultural policies and the promotion of common projects among
member states, notably in the fields of marketing, research and agricultural enterprises.
vi. The implementation of schemes for the joint development of transport, communication,
energy and other infrastructural facilities, as well as the evolution of a common policy in
such fields.
vii. The harmonization of the economic and industrial policies of member states and the
elimination of disparities in the level of development of member states.

Achievements of the Community (ECOWAS)

In considering the activities of the community, we shall touch on its concrete achievements and
also, those in the form of decisions awaiting implementation as at 1987.
Practical achievements:
i. Reduction of custom duties: Tariffs on goods from members have been reduced
considerably.
ii. Provision of some inter-community infrastructures: Nigeria, for instance, has been
supplying electricity from the Kainji dam to some member states like Niger and Togo.
Between Liberia and Cote D’Ivoire, one very good road has been constructed and opened
for use. And there is a proposed road network to link Lagos with Nouckhott, the capital
of Mauritania.
iii. Evidence of free movement of community nationals: At least in Nigeria, there has
been massive influx of the nationals of other community states. A large number of
Ghanaians still offers services in the educational sector of the Nigerian economy.
iv. Preferential sales of previous commodities: Nigeria now sells her crude oil at
preferential lower prices to countries like Ghana and Togo. These members are also
sometimes given credit facilities on long term basis.
v. A mutual defense pact: Following a meeting held by the Authority in Dakar in 1981, the
member states signed a mutual defense pact. In August 1990, when all mediations efforts
failed to achieve any positive result in the Liberian crisis, ECOWAS set up a ceasefire
 Monitoring Group (ECOMOG)which intervened to enforce peace. ECOMOG was also
very active during the crisis in Sierra Leone.
vi. Location of Industries: The member states have taken decisions on how to allot the
allocation of industries among themselves. They have also been invited to participate in
industrial enterprises located in other member states. A good example is the location of
iron and steel industry in Guinea and an invitation to Nigeria to participate in same.

Problems of ECOWAS

ECOWAS, as a community, is already beset with and is likely to face more problems in future
some of which are;
i. Problem of members: The community, with its present 15 members, is one of the most
ambitious ventures in economic harmonization and political integration anywhere in the
world, and in a situation where the highest authority lies in the hands of the heads of
member states or governments, decisions on major issues may be hampered by the
national interests of member states.
ii. Barriers of colonial heritage: The member states are all products of the colonial
masters. The English-speaking countries (Nigeria, Ghana, Sierra Leone, and the Gambia)
were schooled under the British colonial ideals. The French speaking states (Guinea,
Cameroun etc.) hold on tenaciously to the French culture while Liberia is deeply rooted
in the American culture.
iii. Infrastructural barriers: The absence of good roads and transport system and the
inadequate communication system are likely to hamper some of the community’s noble
objectives.
iv. Poverty of member nationals: Most members state are far from prosperity. Even
Nigeria, with her petroleum resources, is still a poor nation. Therefore, the community’s
poverty is a formidable barrier to the attainment of some of its noble objectives, such as
joint development of transport, communication, energy and other infrastructural facilities.
v. Inequality among member states: As at now, Nigeria seems to tower above all other
member state. Tis would likely cause resentment from some side. The other member state
may become wary of the self-imposed leadership of the community by Nigeria. On the
other hand, Nigeria may get reluctant to shoulder most of the burdens of the community.
vi. Dangers of unrestricted immigration: Unrestricted immigration within member states
may aggravate national, economic and social problems. Ghana once sent Nigerians in
Ghana out of their country. Togo and Benin have done the same to Nigerians and
Ghanaians. By 1984, Nigeria had seen the danger in unrestricted influx of citizens of
neighboring countries. The increase in armed robbery and religious disturbances (in Kano
in 1980) was blamed on unrestricted influx of other nationals to Nigeria.
vii. Currency problem: There are many currencies as there are states in the ECOWAS with
none having an international status- not even the naira with its formidable crude oil
revenue backing, therefore these currencies are tied to either the sterling, franc or dollar
rather than to one another. This fact indicates the problem that is likely to be faced by the
idea of a common currency for ECOWAS

Evaluation:
State and explain five problems militating against the aims and objectives of ECOWAS

REGIONAL ECONOMIC COOPERATION

Objectives:
 List the countries in the regional economic cooperation
 State the aims and objective of each of the regional economic cooperation
 Explain the achievements of each of the regional economic cooperation
 Highlight the problems of the regional economic cooperation

The Niger Basin Commission

River Niger takes it source from Fouta Djallon highland in Guinea and flow through many
countries and enters the sea through the Niger delta in Nigeria.
The River Niger Basin Commission was formed the following countries in 1964:
i. Nigeria
ii. Cameroun
iii. Mali
iv. Republic of Benin
v. Chad
vi. Guinea
 vii. Niger
viii. Burkina Faso

Aims and Objectives of Niger River Commission

The objective of the commission includes the following:
i.

i. Sustaining cordial relationship among member nations.

ii. Dealing with navigation matters of the Niger river.
iii. Harnessing resources of the Niger basin effectively and efficiently.
iv. Collection, evaluation and dissemination of data concerning the basin
v. Putting up policies that will control flood.

Achievements of Niger River Basin Commission.

i. It has helped to generate employment opportunities especially to people living around the
basing.
ii. It has assisted in hydro power generation through the water dams found in the northern
part of the country.
iii. It has also helped to established agricultural schemes which have aided the countries in
their quest for sustainable food production.
Major problems of Niger River Basin

a. External aids were not fully utilized

b. There was lukewarm attitude to the importance of the basin as a vehicle of development.
A situation caused by member’s state and the bureaucracy of the commission.
c. The heads of states of member countries have not given the commission’s management
the leadership it deserves.
d. The provision of personnel and the material needed for implementation of programs to
cope with the problems highlighted are inadequate.
e. No impact has been made on poverty alleviation, in spite of its fair increase in national
income.

Lake Chad Basin Commission

The basin was founded on May 22, 1964 by convention and statute signed in N’Djamena,
Republic of Chad, by heads of four member’s countries. The four member’s state are:
 i. Nigeria
ii. Cameroun
iii. Niger
iv. Chad
The Lake Chad Commission stretches between (LCBC) is an Inter- African organization that
links some Anglophone and Francophone African states around Lake Chad. Its meetings are held
twice a year.

Objectives of Lake Chad Basin

i. To maintain a common destiny of the inhabitants of the basin who from time immemorial
have been sharing the same historical heritage.
ii. To identify co-operation among the members through control of the waters of irrigation
iii. To set up the means to regulate navigation and fishing on the Lake Chad, to develop
plantations for the production of food crops which require processing.
iv. To find answers to the absence of modern methods of production in Agriculture, fishing
and other modes of occupation in which these developing countries are connected.

Achievements of Lake Chad Basin Commission

i. The Lake Chad sprinkler irrigation scheme which started in 1976 and irrigate 50,000
hectares of farmlands for the growth of maize, wheat, tomatoes, groundnut, sugarcane
etc.
ii. The re-forestation program which started operating in 1974 to combat the effect of
draught and check the advance of the desert in that area.
iii. Building of school of Agriculture where workers are trained for extension programs from
member’s states who will now train the farmers in modern methods of agriculture with a
view to increasing food production.
Evaluation
i. Mention four objectives of four objectives of Niger River Basin
ii. Explain four problems of Niger River Basin
iii. Highlight three achievements of Lake Chad Basin Commission

TOURISM
Objectives:
 Meaning of tourism
 History Of tourism
 Classification of tourism.
 Roles of Nigerian Tourism Development Corporation

Meaning of Tourism
The world tourist organization, an agency of the united nation, defines tourism as people who
travel to, and stay in, places outside their usual environment for more than twenty-four hours and
not more than one consecutive year for leisure, business and other purposes or related to the
exercise of an activity remunerated from within the place visited.
Tourism can also be defined as the act and process of spending time away from home in pursuit
of recreation, relaxation, and pleasure, while making use of the commercial provision of
services.
As such, tourism is a product of modern social arrangements, beginning in Western Europe in
the 17th century. Although, it is distinguished from exploration in that tourists follow a “beaten
path,” benefit from established systems of provision, and, as befits pleasure-seekers, are
generally insulated from difficulty, danger, and embarrassment.
Tourism, however, overlaps with other activities, interests, and processes, for
example, pilgrimage. This gives rise to shared categories, such as “business tourism,” “sports
tourism,” and “medical tourism” (international travel undertaken for the purpose of receiving
medical care). \

History of tourism.
The history of tourism is of great interest and importance. That history begins long before the
coinage of the word tourist at the end of the 18th century. In the Western tradition, organized
travel with supporting infrastructure, sightseeing, and an emphasis on essential destinations and
experiences can be found in ancient Greece and Rome, which can lay claim to the origins of both
“heritage tourism” (aimed at the celebration and appreciation of historic sites of recognized
cultural importance) and beach resorts. The SEVEN WONDERS OF THE WORLD became
tourist sites for Greeks and Romans.
Evolution of Tourism in Nigeria
Organized tourism in the Nigeria dates back to 1962 with the formation by a group of private
practitioners of the Nigerian Tourist Association for projecting the tourism potential of, and
encouraging tourism activities in Nigeria. In 1964, Nigeria was admitted as a member of what is
now called World Tourism Organization.
In 1976, a Decree establishing the Nigerian Tourism Board was passed and the decree was
amended in 1972 to give birth to the Nigerian Tourism Development Corporation as replacement
of the Nigerian Tourism Board.

Classification of tourism
Tourism can be classified into six distinct categories according to the purpose of travel. These
are as follow:
i. Recreational: Recreational or leisure tourism takes a person away from the humdrum of
everyday life. In this case, people spend their leisure time at the hills, sea beaches, etc.
ii. Cultural: Cultural tourism satisfies cultural and intellectual curiosity and involves visits
to ancient monuments, places of historical or religious importance, etc.
iii. Sports/Adventure: Trips have taken by people with a view to playing golf, skiing and
hiking, fall within this category.
iv. Health: Under this category, people travel for medical, treatment or visit places where
there are curative possibilities, for example, hot springs, spa yoga, etc.
v. Convention Tourism: It is becoming an increasingly important component of travel.
People travel within a country or overseas to attend conventions relating to their business,
profession or interest.
vi. Incentive Tourism: Holiday trips are offered as incentives by major companies to
dealers and salesmen who achieve high targets in sales. This is a new and expanding
phenomenon in tourism. These are in lieu of cash incentives or gifts. Today, incentive
tourism is a three billion dollars business in the USA alone.

Roles of Nigerian Tourism Development Corporation.

The NTDC under the supervision of the Federal Ministry of Tourism and Culture is charged with
the responsibility of promoting, marketing and coordinating tourism activities in the country. Its
major functions include;
i. Registration, classification and grading of hospitality and tourism enterprises to ensure
standardization of facilities and efficient service delivery in line with international
standards.
ii. Coordination and promotion of major tourism and cultural events such as festivals to
promote tourism and attract international tourists.
iii. Provision of technical and advisory services on tourism development matters.
iv. Identification, documentation and promotion of tourist sites and attraction in each of the
thirty-six states of the federation.
 v. Provision of assistance in the rehabilitation, upgrading and development of important
tourist sites in Nigeria.

Selected tourist centers in Nigeria

i. Abia: National War Museum, Blue River Tourist Village, Akwette, Arochukwu shrine.
ii. Adamawa: Three sisters hill (that stand side by side)
iii. Akwa Ibom: Ibeno (famous for yachting and swimming), Oron museum (collection of
fine African carving), Bayelsa: oil installations
iv. Benue: Enemebia Falls, Ushanga hills
v. Osun: Osun festival at Osogbo, Ile-Ife City, Opa Oranmiyan and Ife Museum.
vi. Ondo: National Museum at Owo, Idanre Hills
vii. Kano: Sites of traditional arts and crafts; in leather works, weaving, pottery and wood
carving, ancient walls and gates first built about 900 years ago; Kano zoological garden
at Ganku Albaba.
viii. Cross River: Obudu Cattle Ranch, Kwa Falls, Marry Slessor
ix. Niger: Gurara Falls in Boru village, Mungo Park’s cenotaph, Kaiji Lake and National
Game Reserve.
x. Imo: Rolling Hills of Okigwe, Owerri Amusement Park, Oguta Lake Holiday Resort.

Advantages of tourism

a. It is a source of income for many countries. Foreigners engage in business transactions

and they pay tax to the government.
b. Generation of foreign exchange. Tourists coming to a country spend foreign currency.
This is a major source of revenue for blessed with tourist centers.
c. Infrastructural development. In order to develop tourism, there is need to develop
infrastructural facilities like road, water, electricity. This will benefit the community.
d. Environmental Protection. Through tourism, there is incentive to preserve nature,
conserve wildlife and ensure urban cleanliness and neatness.
e. Provision of employment opportunities. It provides employment opportunities for small
scale business enterprises which are located in rural communities because it comes with
hotel, restaurants and tour companies. All these provide direct employment for the people
associated with them.
Disadvantages of tourism
 a. Attraction of visitors with different and inharmonious lifestyles, beliefs and ideas: the
tolerance of the local communities may be stretched to its limits.
b. Promotion of negative or illegal economic activities. These include begging, gambling,
alcoholism and use of, and trade in, narcotics and endanger species.
c. Environmental degradation: it may threaten specific natural resources like beaches, coral
reefs, sand dunes and historical sites. It may also increase litter, noise and pollution-
including through direct contribution to sewage and solid waste pollution.

d. It can lead to violation of human rights. The zeal by policy makers to boost tourism often
tempt them to violate the human rights of the local population. in this regard people have
been displaced from their lands to provide tourist resorts, beaches have been reserved for
tourist, while access is barred to local people.
e. Spared of infection: if the tourists are not screened against all communicable diseases
before being allowed to arrive the country or community of destination, they may spread
to the local population communicable diseases against which they, unlike the tourist do
not have immunity.

Evaluation
i. What is tourism?
ii. State five roles of tourism in the development and growth of an economy
iii. Explain four roles of Nigerian Tourism Development Corporation.
iv. Describe four advantages and three disadvantages of tourism in the social life of a country

INTERNATIONAL FINANCIAL INSTITUTIONS

Objectives:
 State names of international financial organization
 Brief history of each of the financial institution
 Objectives of each of the international financial organization
 Contribution, advantages and problems of each of the international financial institution

International Financial Institution

The devastation caused by the second world especially to the third world countries necessitated
the creation of two world bodies to facilitate the reconstruction of the affected countries.
The two world bodies are the International Bank for Reconstruction and development popularly
called World Bank and International Monetary Fund.

The International Monetary Fund (IMF)

The international Monetary Fund was established in 1947 as a result of a conference sponsored
by the United Nation at Bretton Woods in New Hampshire, U.S.A. In 1944, IMF had forty
original members, with Ethiopia as the only African country. Now, there are one hundred and
forty-six (146) member states, 118 of which are from the third world countries. It is run by a
board of Governors whose members are finance ministers or governors of the central bank of
member countries.

Objectives of International Monetary Fund (IMF)

a. Promotion of monetary cooperation and serving as a forum for consultation and

collaboration.
b. Facilitating expansion and development of international trade.
c. Promote stability in exchange rate among currencies of member countries.
d. Provide a medium foe a multilateral system of payments on current transactions among
member states.
e. Assisting member countries to correct maladjustments in their balance of payment and
economic policies.
Advantages West African Countries derive from IMF

a. The IMF offers low interest loans that are necessary to address economic issues
b. Member’s states use their drawing rights to borrow from the IMF to offset balance of
payments difficulties.
c. African nations receive professional assistance and financial direction for their economic
planning.
d. IMF is involved in the special surveys required for critical economic and social projects
of African countries.
e. Guidelines given by IMF for economic reforms are used by African countries.

Problems or Weaknesses of IMF

a. Because of the overwhelming influence of the industrially advanced countries, the

IMF does not give enough attention to the problems of the less develop countries.
b. As in the World Bank itself, the IMF is too rigid and its balance of payment support
loans are given under terms of severe conditionality which often require borrowing
countries to deflate their economic significantly to fulfill those conditions.
c. In spite of the objective of the Fund, supply of international liquidity I sometimes
inadequate. This is because such supply is still tied to the availability of gold and
dollars up to 25%.
d. Because free convertibility is tied to high gold reserves, it is not always possible for
some national currencies to be freely converted all the time.
e. Contrary to one major objective of maintaining stable exchange rates in accordance
with the spirit and letter of the Bretton Woods agreement, member’s states on some
occasions had to lower their exchange rate during periods of financial crises. E.g. the
British pound sterling was devalued in 1952, 1961, 1964 and 1967.

International Bank for Reconstruction and Development (IBRD)

This is otherwise referred to as the World bank. It was established in 1945 as a result of the
United Nation Organization (UNO) Bretton Woods agreement of 1944, immediately after World
War II.
The IBRD was set up in order to redress some of the devastation consequence of world war II.
This was setup almost at the same time with the International Monetary Fund. It has one hundred
forty-eight which subscribed to the whole of its capital. It is governed by a Board of Governors,
Executive Directors and a President.
Objectives of International Bank for Reconstruction and Development (IBRD)

a. Lending money to the public sector or private institution of member countries with guarantee
from the central bank of the borrowing country.
b. Giving support to development corporations, such as Nigerian Industrial Development Bank
now Nigeria Industrial Bank.
c. Working closely with private investors for the establishment and improvement of productive
private enterprises in member states.
d. Financing projects aimed at promoting economic and social development.
e. Providing training facilities for members countries that have need for such facilities

Problems of International Bank for Reconstruction and Development

a. The World Bank has been too rigid in its lending functions. it could have adopted a more
viable or client-friendly one.
b. The non-liberal approach has not given the less developed countries equal access to the
World Bank like the developed nations
c. Some countries do not pay their dues.
d. Some countries take loans and don’t pay their debts.

African Development Bank

The African Development Bank was established in 1964 through the efforts of the Organization
for African Unity (OAU), now African Unity (EU and United Nation Economic Commission for
Africa () UNECA). It has its headquarters in Abidjan. Membership of the ADB comprises all
African countries. The purpose of setting up the bank is to contribute to the economic
development and rapid progress of members.
[

Aims and Objectives of African Development Bank

S

a. Financing project which will foster cooperation.

b. Pooling financial resources that might be of use to needy African countries.
c. Financing projects and investments approved by it for member countries.
d. Undertaking or participate in the selection, study and preparation of projects.
e. Mobilizing resources from outside Africa nation to finance projects.
f. Providing technical assistance in the execution of projects.
Evaluation
a. State three aims and objectives of the following financial institutions:
i. International Monetary Fund ii. African Development Bank
b. Explain three ways by which African Development Bank has impacted in the development of
economy of Nigeria.

NEGOTIABLE INSTRUMENTS
Objectives:
 Define negotiable instruments
 Types or classes of negotiable instruments
 Characteristics of negotiable instruments.

Meaning of negotiable instrument

These are documents possessing certain qualities and entitling the holder to a specified sum of
money. The right can be transferred, usually by endorsement to another party. A person who
acquires a negotiable instrument for value and in good faith is deemed to acquire the legal title to
it. They are documents used in commercial and financial transaction to secure the payment of
money.

Types and classes of negotiable instrument

NEGOTIABLE NON-NEGOTIABLE
Bill of Exchange Dock warrant
Promissory note Share certificate
Cheques Bill of Lading
Dividend Warrants Postal order
Debenture payable to bearer Money order
Bearer bonds IOU
Characteristics of negotiable instruments

a. They are transferrable by delivery and endorsement or by mere delivery.

b. It is presumed that consideration has been given for the instrument.
c. The holder can sue in his own name as full legal title passes on delivery.
d. The law must recognize it as a negotiable instrument.
e. Notice to the person liable in respect if negotiable instrument is not required

Negotiable instruments

a. Bill of Exchange: A bill of exchange is an unconditional order in writing, addressed by one

person to another, signed by the person giving it, requiring the person to whom it is addressed to
pay on demand or at a fixed or determinable future time a sum certain in money to the order of a
specific person or to persons.
To comply with the definition of a bill exchange, the instruments must fulfill the following;

i. Unconditional order
ii. It must be in writing
iii. Addressed by one person to another
iv. Signed by the drawee
v. Sum certain in money
vi. Payable on demand or fixed determinable date paid to the order of a specified person.

Parties to a bill
i. Drawer: This is the person responsible for drawing a bill. He is the creditor, he originates
the bill.
ii. Drawee: This is a person or institution on which a bill is drawn. The drawee is the debtor
and acceptor of the bill.
 iii. Payee: This is the person to whom the money is meant to be paid. He is to receive the
money from the drawee.
[

Types of bills of exchange

a. Inland bill: This is a bill which is both drawn and payable within a country or which is
drawn within a country upon somebody resident therein.
b. Foreign bill of exchange: This is a bill which is payable outside the country. It is like
other bills. It is used for making payment in international trade. it is drawn in a set of
three by the creditor, accepted by the debtor and unless payable at sights allows the
debtor a period of credit, usually three months, and at the same time enables the creditor
to receive payment at once if it can be discounted.

Endorsement
This is the signature of name on the back of the bill, which seeks to transfer the rights to some
other person or party. The payee of a bill is entitled to amount on the bill and he may assign this
entitlement to someone else.

Requirement of valid endorsement

a. It must be written. The signature of the endorser is sufficient.
b. Endorsement must be of the entire bill. An endorsement for part only of the sum named,
or to two or more endorses severally does not operate as a negotiation of the bill.
c. Where there are several payees, all should be endorsed.
d. The manner of endorsement should correspond exactly with the drawing.
e. Where there is insufficient space on the bill for further endorsement an additional piece
of paper called ‘allonge’ may be glued to the bill to receive further endorsement.

Types of endorsement
a. Special endorsement: This type of endorsement specifies the person to whom the bills is
payable.
b. In blank endorsement: If an endorsement does not name a new holder, then it is called
endorsement in blank and it makes the bill payable to bearer so that anyone in possession
of it becomes its holders
c. Restrictive: This is a kind of endorsement which prohibits further negotiation of the bills.
[
Effect of endorsement
a. Endorsement ensures validity of the bill.
b. That the bill will be paid.
c. It ensures that the endorsers will pay if the previous party defaults
d. To guarantee that all previous signatures are genuine and authorized.

Discharge of a bill
a. A bill is discharged when all rights of action on the bill or instruments are extinguished.
b. By payment in due course.
c. By renunciation, that is if the holder renounced his rights against the acceptor absolutely
and unconditional.
d. By cancellation: if the bill is intentionally cancelled by the holder or his agent and the
cancellation apparent.
e. Material alteration: a bill may be discharged by material alteration; if the date, sum
payable and time of payment are altered then it may be discharged.

Advantages of a bill
a. Bill can be used for payment in international trade.
b. It is negotiable i.e transferable by endorsement.
c. It is a type of document evidencing an entitlement to receive money.
d. It enables one of the parties to obtain a period of credit.
e. It requires the buyer to pay at a fixed future date.
f. It reduces the problem inherent in carrying cash from one place to another.
g. It is legal document.

Promissory note
Promissory note is an unconditional promise in writing made by one person to another, signed by
the maker, engaging to pay on demand or at affixed or determinable future time, a sum certain in
money to or o the order of a specified person to bearer. It is a promise to pay a sum of money. It
can be an inland note or foreign note.
Parties to promissory note
There are two parties to a promissory note. These are; Maker and Promisee
a. Promisor: This is the maker of the note. He is usually the debtor. The promisor is
primarily liable to pay it.
b. Promisee: This is the payee to whom money is paid. He is usually the promisor’s creditor
c. The drawer is the creditor or seller of the goods.
A bill needs to be represented to the acceptor in order to make him liable for payment, bill
requires acceptance and bills are drawn in set.

Evaluation
i. Define negotiable instruments
ii. State three types of negotiable instruments
iii. Highlight four ways by which a bill can be discharged
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