In the third quarter of 2023, Nigeria’s Terms of Trade (ToT) experienced a slight dip of 0.03 percentage points, according to data from the National Bureau of Statistics (NBS). The ToT, a measure of the value of the country’s trade with other nations, signifies a decline, indicating a higher value of imports compared to exports. Despite the negative trend since Q3 2022, the Q3 2023 performance suggests a moderated rate of decline, raising optimism for a potential positive turn in the fourth quarter, Q4 2023.
The NBS’s Commodity Prices Indices and Terms of Trade report, released recently, highlighted that the ToT has been consistently on a downward trajectory since Q3 2022, witnessing a fall of 0.50 percentage points from an earlier increase of 0.11 percentage points in Q2 2022. The Q3 2023 decline, amounting to 0.04 percentage points, was primarily attributed to the September figures.
The report indicated that the All Commodity Group Import Index saw a marginal increase of 0.21 percent in Q3 2023, while the Export Index also rose by 0.18 percent during the same period. The All-Commodity Terms of Trade for July, August, and September 2023 stood at 102.46 percent, 102.47 percent, and 102.43 percent, respectively.
Economy watchers say the data implies that the Nigerian economy faced challenges in maintaining a favorable balance between imports and exports, leading to the observed decline in the ToT. However, the marginal nature of the decrease in Q3 2023 suggests a potential turnaround in the upcoming quarter. Analysts and policymakers will closely monitor the economic indicators to assess the impact on the nation’s trade dynamics and overall economic health.
