Recent report in the media highlights that Nigerias GDP has dropped to $296 billion in 2016, in contrast to the $481 billion recorded in 20151 and Nigeria has lost its position as Africas largest economy to South Africa. This conclusion was based on the computation of GDP with current naira-dollar exchange rate. However, while the naira has significantly lost its official value since the adoption of a flexible exchange rate, estimating GDP merely with a single exchange rate figure (rather than its yearly average) cannot be regarded as an appropriate method to conclude on Africas largest economy.

The Naira strengthened against the dollar in the review week. Specifically, the Naira appreciated by 2.7 percent to N355/$ (parallel market rate) on June 17, 2016, following the release of the flexible FOREX policy guidelines by the CBN on June 15, 2016. The new policy effectively adopts a single market structure hosted at the autonomous/inter-bank market. The inter-bank trading scheduled to commence on June 20, 2016 will be market-determined, officially eliminating the N197/$ peg. To ensure foreign exchange liquidity, primary market dealers have been introduced while the CBN will participate in the market through periodic interventions.

In 2015, economic growth in Sub-Saharan Africa (SSA) slowed to 3.4 percent from 4.6 percent the previous year. The economic slowdown in the region was the result of an interplay of several external and domestic factors such as lower commodity prices, slowdown in the economies of major trading partners, tightening borrowing conditions, political instability and conflict, electricity shortages and other infrastructure deficiencies (World Bank, 2016). This sluggish growth trends is in contrast to the impressive growth recorded in the region, over the past decade.