National Telescope national telescope newspaper
A member of President Muhammadu Buhari’s Economic Advisory Council, Bismarck Rewane, has projected that Nigeria will suffer a total Gross Domestic Product (GDP) loss of $18 million per month due to the negative effects of the Naira redesign policy of the Central Bank of Nigeria (CBN).
Rewane, who is also the Chief Executive Officer of Financial Derivatives Company, made the projection during a presentation at the Lagos Business School.
He attributed the decline in GDP growth to the reduction in velocity of money in circulation and total man-hours loss in the economy.
He said: “Total man-hours loss in a month will be 120 hours and total GDP loss in a month will be $18 million.
“Trade is settled mainly in cash and POS (Point of Sale), although 70 per cent 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.”
The CBN had fixed February 10 as the deadline for the validity of old naira notes.
But the Supreme Court temporarily restrained the Federal Government from banning the old Naira notes and fixed it for tomorrow for hearing the matter.
Similarly, the National Council of State meeting hastily convened by President Muhammadu Buhari last week over the vexed issue advised that the old and new naira notes be made available to the suffering masses of the country.
Despite these and pleas by experts for a rethink of the policy, the new notes remain scarce and Nigerians are also finding it hard to get the old ones.
Meanwhile, the apex bank has attributed the scarcity to hoarding and advised citizens to embrace alternative payment channels such as eNaira and internet banking.
(The Nation)
