By Babajide Komolafe
THE Central Bank of Nigeria (CBN) yesterday said that the country’s Terms of Trade (TOT) improved in the fourth quarter of 2015.
The CBN disclosed this in its Terms of Trade Bulletin for the fourth quarter released yesterday.
The bulletin stated, “Nigeria’s all products TOT index for October, November and December 2015 stood at 103.02, 102.28 and 100.61, respectively. These indices showed favourable TOT for all the months of the quarter, indicating that Nigeria used 3.02, 2.28 and 0.61 per cent less of her exports to obtain the same level of imports in the respective months under review”
Terms of Trade (TOT) is the ratio of a country’s export prices to her import prices, and expresses the quantity of import goods a country can purchase per unit of its export goods. It is common practice to multiply this ratio by 100, in which case the TOT is expressed as percentage. If the TOT is above 100, implying that the country can buy more of imports for a given level of exports, it is said to be favourable. Otherwise, the TOT is considered unfavourable.
The CBN report stated, “Available statistics revealed that the product groups that contributed most to the positive trade positions during the review period were the: “Vegetable products”, “live animals; animal products”, “Footwear, headgear, umbrellas, sunshades, whips etc.”, “Wood and articles of wood, wood charcoal
In Q4, 2015, the trade indices for “live animals; animal products” were 330.63, 289.04 and 227.42 for the months of October, November and December, respectively. These show favourable trade positions of 230.63, 189.04 and 127.42 per cent for the months, respectively.
Similar positions were also recorded in the months of the preceding quarter and the corresponding quarter of 2014 except the month of December which had an unfavourable trade position
“The trade indices for “Prepared foodstuffs; beverages, spirits and vinegar; tobacco “ in October, November and December 2015 stood at 100.92 ,102.88 and 104.32 per cent, respectively, indicating favourable trade positions of 0.92, 2.88 and 4.32. Also, all the months in the preceding quarter and the corresponding quarter of 2014 recorded favourable trade positions
The “Vegetable products” group recorded indices of of 316.86, 343.77 and 295.80 during the months under review, implying favourable trade positions of 216.86, 243.77 and 195.80 per cent in October, November and December 2015, respectively. Similarly, all the months in the preceding quarter and the corresponding quarter of 2014 recorded favourable TOT”.