Naira Swap Policy: Q1 2023 GDP Projected to Drop by 3-5%

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The Central Bank of Nigeria’s (CBN) naira swap policy has caused a predicted drop in the country’s gross domestic product (GDP) in Q1 2023. Bismarck Rewane, CEO of Financial Derivatives Company Limited, shared his insights on the policy’s effects during a live appearance on Channels Television’s “The 2023 Verdict” election programme.

In October 2022, the CBN announced its plan to redesign the N200, N500, and N1,000 banknotes, setting a deadline of January 31, 2023. Although the deadline was later extended by 10 days, the nationwide scarcity and outrage caused by the policy led to the Supreme Court ordering the CBN to suspend its implementation.

Rewane stated that the policy will conservatively affect GDP by three percent this quarter and could reduce GDP by five percent, if no action is taken soon. Data showed a sharp increase in the average number of people in front of ATMs in different areas of Lagos, with long wait times causing a decrease in sales of products such as flour, rams, and cement.

Despite this, the economist did not see any direct effects of the policy on the forthcoming elections, but warned of the need for a “laxative” to address the country’s policy indigestion and constipation.



Joseph Omoniyi

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