Written by Kayode Ekundayo
With the introduction of cashless policy by the central Bank of Nigeria, an economist, Bismarck Rewane has predicted that deposits in banks could rise to N18.5 trillion as against the current N16 trillion before the end of the year.
Rewane, who is the Managing Director/CEO, Financial Derivatives Company, said at the monthly economic summit of the Lagos Business School executive breakfast meeting in Lagos that the country’s available cash would decline by 50 per cent to N2.5 trillion from the current N5 trillion.
He said as a result, there would be an increase in the rate of circulation due to transactions settlement speed while bank float levels would reduce.
He said the recent strike against fuel subsidy removal by the government cost the country $6.16 billion.
Rewane said if eventually subsidy is completely removed, about $8 billion would move from consumption to government, pushing its expenditure to $42 billion while private investment would remain unchanged at $33 billion.
He said inflation will increase by 2-3 per cent this month from the current 10.3 percent.
He described the cut in cost of governance of 25 per cent announced by Federal Government as mainly symbolic and may not stop the huge waste and leakages in government.
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