Bismarck Rewane, chief executive officer of Financial Derivatives Company, has stated that the negative impacts of the Central Bank of Nigeria’s naira redesign strategy may result in a monthly GDP loss of $18 million.
According to The Cable, Rewane spoke during a recent lecture at the Lagos Business School.
“Overall man-hours loss in a month will be 120 hours, and total GDP loss in a month will be $18 million,” Rewane added, attributing the dip in GDP growth to a decrease in money velocity in circulation.
“Trade is settled mainly in cash and POS, although 70 per cent of trading transactions are settled by cash.
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“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 the GDP will fall.”
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