Nigeria's economy experienced a slowdown in annual GDP growth, reaching 2.3% in the first quarter of the year, attributed to the disruption caused by the government's plan to replace old banknotes with new ones.
This data was released just hours ahead of the central bank's interest rate announcement and the upcoming inauguration of President-elect Bola Tinubu, who has pledged to revive economic growth in the country.
In the first three months of 2022, the GDP recorded an annual growth rate of 3.1%.
According to the National Bureau of Statistics (NBS), the reduction in growth can be attributed to the adverse effects of the cash crunch experienced during the quarter.
The government's plan to introduce new banknotes aimed to control liquidity, curb inflation, and move towards a cashless economy, but it caused disruptions in payment systems, particularly in a country where cash transactions are predominant.
Full implementation of the policy has been postponed until the end of the year.
The NBS reported that the services sector drove first-quarter growth, growing by 4.4% year on year, while the oil sector, which constitutes a significant portion of government revenue and foreign-exchange reserves, contracted by 4.2%.
Nigeria, as the top oil producer in Africa, recorded an average daily oil output of 1.51 million barrels per day (mbd) in the first quarter, slightly higher than the average of 1.49 Mbps registered in the same quarter of the previous year.
Analysts suggested that the slowdown in the growth rate might lead the central bank to maintain interest rates during its policy meeting, despite the presence of double-digit inflation in the economy.