According to Bismarck Rewane, CEO of Financial Derivatives Company, Nigeria will suffer a total GDP loss of $18 million per month as a result of the negative effects of the naira redesign policy.
In the third quarter of 2022, Nigeria’s Gross Domestic Product stood at 45.3 trillion Nigerian naira, around 101 billion U.S. dollars. In 2021, the value reached around 173.5 trillion NGN, over 390 billion U.S. dollars.
The decline in GDP growth was attributed by the economist to a decrease in the velocity of money circulation and total man-hours lost in the economy.
“Total monthly man-hours loss will be 120 hours, and total monthly GDP loss will be $18 million,” Rewane said.
“Trade is settled mainly in cash and POS, although 70 percent of trading transactions are settled by cash.
“Therefore, the 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.”
