Effect of Cashless Policy on Economic Growth in Nigeria Using Autoregressive Distributed Lag Model
Kolade Anna Onarakpoberu
Ph.D. Research Student, Department of Statistics, Nasarawa State University, Keffi, Nasarawa State, Nigeria
Adenomon Monday Osagie
Lecturer, Department of Statistics, Nasarawa State University, Keffi, Nasarawa State, Nigeria
Bilkisu Maijamaa
Lecturer, Department of Statistics, Nasarawa State University, Keffi, Nasarawa State, Nigeria
Shammah Emmanuel Chaku
Lecturer, Department of Statistics, Nasarawa State University, Keffi, Nasarawa State, Nigeria
ABSTRACT:
In a cashless economy, credit or debit cards can be used to complete transactions instead of carrying cash as the main form of paying for goods and services. The government’s cashless policy discourages the usage of cash and promotes the development of electronic payment systems with an effort to reduce the amount of actual cash in-flow in the economy, though not aimed at eradicating the use of cash in completing any form of payment, but it is to help to minimize the handling of cash and excess cash in circulation in the Economy. Recent research has shown that, in comparison to the expected outcome, the supposed contributions of cashless policies to economic growth are not very significant. Other studies claim that the cashless policy will accelerate the nation’s economic growth in line with international best practices. Secondary data was sourced from CBN from 2012-2023, using ARDL Model approach and error correction mechanism which aims to examine the effect of cashless policies on Nigeria’s economic growth and provide a broad overview of the use of different e-payment systems in Nigeria. The findings revealed that on the long run automated teller machine value is positively related to GDP but not significant, while Cheque value is negatively related to GDP and significant, Mobile App transfer is positively related to GDP and significant. POS machine values and Online transfer values are negatively related to GDP and not significant while on short-run, Cheque and Online transfers had a positively significant effect on Gross Domestic Product while ATM values, POS machine values, and Mobile App transfer values had no evidence of a short run relationship on GDP in Nigeria. The error correction mechanism showed the presence of co-integration, meaning there exists a long-run relationship among the dependent and independent variables. The study found that cashless policy has positive effect on economic growth in Nigeria, and recommended Central Bank of Nigeria should make sure that all banks provide their clients with good and functional ATM services. This is anticipated to accelerate the use of alternative payment methods, one of the justifications for implementing the cashless policy.
Published in: International Journal of Research in Interdisciplinary Studies (Volume 2, Issue 11, November 2024)
Page(s): 92-99
Date of Publication: 25/11/2024
Publisher: IJRIS
Cite as: Kolade Anna Onarakpoberu, Adenomon Monday Osagie, Bilkisu Maijamaa, Shammah Emmanuel Chaku, “Effect of Cashless Policy on Economic Growth in Nigeria Using Autoregressive Distributed Lag Model,” in International Journal of Research in Interdisciplinary Studies, vol. 2, no. 11, pp. 92-99, November 2024.