Nigeria’s GDP to lose $18m monthly due to Naira redesign —Rewane

The Naira redesign policy will result in an $18 million monthly loss in Nigeria’s gross domestic product (GDP), the Chief Executive Officer of the Financial Derivatives Company, Bismarck Rewane, has revealed.

Rewane said on Tuesday during a presentation at the Lagos Business School, that the loss is due to cash accounting for 70 per cent of trading transactions.

The economist explained that the GDP would bear the brunt of a decline in cash circulation within the trading sector.

Rewane’s statement was on the back of the trade disruption caused by the scarcity of Naira notes, which has seen many Nigerians depend on Point of Sale (PoS) operators to withdraw, as banks run out of cash.

Read also:Nigeria’s GDP slows to 2.25% in Q3 on low crude production

Speaking on the impact of the situation, Rewane said, “Total man-hours loss in a month will be 120 hours and total GDP loss in a month will be $18 million.”

He added “Trade is settled mainly in cash and POS, although 70 percent of trading transactions are settled by cash.

“Therefore, velocity of circulation in the trading sector (16 times) is approximately four times more than the formal sector.

“A decline in the velocity of circulation could reduce output in the trading sector. Hence its contribution to GDP will fall.”

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