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Nigeria’s Terms of Trade falls by 2.7% in Q3’19-NBS

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By Elizabeth Adegbesan

Nigeria’s Terms of Trade (ToT) weakened slightly in the third quarter of last (Q3’19) as it fell by 2.7 percent to 100.99 index points from 103.8 index points in Q2’19.

The National Bureau of Statistics (NBS) disclosed this in its latest Commodity Price Indices and ToT report for Q3’19.

According to the bureau, the 2.7 percent decline was as a result of 14 percent and 5.2 percent decreases recorded in the prices of trade with Africa and Europe respectively.

The TOT is the ratio between a country’s export prices and its import prices. An increase in the terms of trade between two periods (or when TOT is greater than 100 percent) means that the value of exports is increasing relative to the value of imports, and the country can afford more imports for the same value of exports.

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The report stated: “The All Region group terms of trade stood at 103.39 in July, 102.56 in August and 100.99 in September. This represents decreases of 0.8 percent in August and 1.53 percent in September. On average, the terms of trade

decreased by 2.33 percent between July and September. This decrease is explained mainly by decreases in the prices of Trade with Africa (-13.90 percent) and Europe (-5.21 percent).

“The All region group export index, on average, rose by 0.12 percent between July and September. This was due to marginal increases in the export prices to Africa, America and Europe. The month on month changes showed that the All region group export index decreased (-0.12 percent) in September after increasing 0.24  percent in August.

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