To examine the impact of the cashless policy on economic growth of nigeria. A major challenge for the nigerian economy was its macroeconomic volatility driven largely by external terms of trade shocks and the countrys large reliance on oil export earnings. Cashless policy and contradictory fiscal policies punch. Cashless nigeria the central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies. The economic reforms and prudent policies have contributed to the consolidation of. The effect of cashless policy of government on corruption in.
Nigerias move to a cashless regime the central bank of nigeria cbn in 2012 commenced the implementation of the policy of the cashless nigeria project, which aims at reducing not eliminating the amount of physical cash in circulation in the economy, and encouraging more electronicbased transactions. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000. More number of traders was sampled, compared to students and civil servants, because they are more into business and financial transactions. Theoretical background cashless economy is not the complete absence of cash, it is an economic setting in which goods and services are bought and paid for through electronic media. The impact of the cashless policy on economic growth of. Based on the foregoing issues at hand, the main aim of this study is to conduct an appraisal of the effects of cashless economy policy on financial inclusion in nigeria. Getting the policy response right matters as falling economic growth imposes a real human cost on the population. Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a mean of exchange of transaction but rather with the use of credit or debit card payment for goods and services.
Cashless nigeria is a policy established in the year 2012 by the central bank of nigeria to curb excesses in the handling of cash in the nigerian federation. To proffer suggestions on how cashless policy and other monetary policies can be managed for better contribution to the economic growth and development of nigeria. Substantially constrain the parallel economy, particularly in illicit activities. Nigeria rates far better than most subsaharan african countries in terms of business constrains, with. Nigeria abstract the paper discussed the effects of cashless policy on the nigerian economy, how it was kickstarted in lagos, means of payments both manual and electronic, positive and negative effects of cashless policy, benefits to the economy and stakeholders, suggestions were made. In other words, the study examines how cashless policy based on some selected factors lead to financial inclusion in nigeria. Like any other economy that is well aware of the benefits that underlie a cashless economy, government has for the past decade invested a lot to ensure that rwandas vision of a cashless economy.
This study examined the impact of cashless policy on the. The impact of adopting cashless payment on economic growth can only be significantly observed in the long run. Sep 26, 2016 a dispute between nigerias monetary and fiscal policy makers over how to lift the economy out of its worst slump in more than two decades may delay a recovery in africas most populous country. Introduction nigeria being an import dependent economy is faced with stagnated growth, unstable business cycles and economic fluctuation. The impact of monetary policy on the economic growth of nigeria. Also, the atm seems to be the best and most common means of effecting cashless policy based on the magnitude of its relationship with gdp. As part of our ambition to be one of the best 20 economies before the year 2020, cbn informed the world that nigeria would commence the process of changing to a cashless economy by january 2012.
The apex bank said it made the decision during the 493rd bankers committee meeting, which held on february 8th in lagos. The impact of central bank of nigeria cashless policy in. Cbn reintroduces cashless charges on bank deposits. Given the policy s objectives, the paper xrayed the associated benefits of the policy. Cashless economy and financial statement reporting in nigeria emengini, steve emeka ph. In nigeria as it is in many developing countries, cash is the main mode of payment. To examine the various challenges associated with the implementation of the cashless policy banking. The nigerian financial system has always had a huge informal sector resulting in financial dualism with its attendant consequences including prevalence of cash transactions. Pwc nigerias economic alert is a series of publications on major topics, issues and events impacting the. The result put together gives us an important policy direction towards what can enable the country to increase cashless payments. The political, economic and social dynamics of nigeria. To what extent will the cashless economy affect the effectiveness of the financial statement reporting for economic development in nigeria.
This study is to investigate the effects, challenges and prospects of cashless policy on the nigerian economy. Nigerian economy will struggle to realise growth much higher than 4. This research work assesses the impact of agricultural policies on nigerian economy. Enable the adoption of new wireless cashless technologies.
Policy options for nigerias economic crises vanguard news. Therefore, nigerian banks should utilize the benefits of the cashless policy and engage in efficient financial intermediation for enhanced bank profitability. According to central bank of nigeria cbn, 2011 the policy is expected to reduce cost incurred in maintaining cashbased economy by 90% upon its full implementation in nigeria. This is known to have several negative implications for an economy, which is. This study examined cbn cashless policy by exploring its impact on the nigerian economy. The study also explains the hurdles coming in the way of making an economy cashless. The business outlook for nigeria is both challenging and promising.
The impact of oil on nigerias economic policy formulation by biodun adedipe, ph. Overview of the nigerian economy economic and social environment since 2003, the government of nigeria has sustained farreaching economic reforms at the federal level, particularly in public finance management, and the financial sector. The economy of nigeria is a middleincome, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. The adoption of one type of cashless payment will affect another type of cashless payment in the short run. Cashless economic policy and sustainable development in nigeria economy. Pdf effects of cashless economy policy on financial.
This study when completed will add to the body of knowledge in the area of banking and finance as literature on cashless policy in nigeria is scarce. Preface why the central bank of nigeria made the cashless policy. Without significant structural policy reforms, nigerias mediumterm growth is projected to remain stable around 2%. Achieving a high level of economic development through transforming the countrys real sectors will not only reduce. The nigeria economic report represents a new world bank product intended to be produced on a biannual basis. Public disclosure authorized nigeria economic report. Aug 28, 2016 the impact of the cashless policy on economic growth of nigeria. Monetary policy and its effectiveness on economic development.
The impact of oil on nigerias economic policy formulation preamble economic policy is the actionstatement of the government pertaining to particular sectors of the economy, describing the intended objectives and how to achieve them. The study covered the key issues on nigerian agricultural policies especially as it concerned the formulation and implementation of agricultural policies and programmes as well as their achievements in the agricultural sector in nigeria. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting. Download undergraduate projects topics and materials accounting, economics, education. Kehinde, james sunday department of accounting and finance, faculty of management sciences, lagos state. By some measures, nigerias economy ranked among the most volatile in the world for the period 1960 to 2000 world bank, 2003. Since cashless policy is a recent economic policy with no previous data and more so, the study seek the opinion of the people by examining the impact analysis of the policy. Monetary policy and its effectiveness on economic development in nigeria author akinjare victoria, a. This new technology in use of cash in the economy arose as a result of many economic reasons. The impact of cashless policy on the economic growth of nigeria, largest undergraduate projects repository, research works and materials.
By babajide komolafe lagos the central bank of nigeria, cbn, yesterday, reintroduced charges on cash deposits in banks, which would take effect at different dates in different parts of the country. Adedipe associates limited, victoria island, lagos, nigeria. Effects of cashless economy policy on financial inclusion in nigeria. In 2015, the central bank of nigeria issued a notice to all banks that began collecting charges on withdrawals above the threshold in the remaining 30 states. Based on the forego ing issues at hand, the main aim of this study is to conduct an appraisal of the effects of cashless economy policy on financial inclusion in nigeria. Nigerian economic policy dispute hinders chances of recovery. Each edition of the ner includes a macroeconomic overview and gives special attention to an additional topic of high policy relevance. Bank monetary policy could be an effective tool to encourage investment, reduce unemployment, reduce lending rate and stabilize the economy of nigeria. Cashless policy and its effects on the nigerian economy adu, cecilia adurayemi department of accounting and finance, crawford university, igbesa, ogun state nigeria abstract the paper discussed the effects of cashless policy on the nigerian economy, how it was kick.
This paper studied the impact of cashless policy in nigeria. In the light of highly expansionary public sector fiscal policies in 2001, the. Here the research is presenting the activities of the central bank of nigeria cbn on cashless policy which is aimed at economic growth and development in nigeria. Fiscalmonetary policy and economic growth in nigeria. Cashless economic policy and sustainable development in. However, the cost of cash to nigeria financial system is high and increasing. Overview of the nigerian economy african development bank.
While the political economy of the country is increasingly investorfriendly, the state of the countrys infrastructural development remains abysmal. The impact of the cashless economy policy on nigerian. Cashless policy and economic activities in developing. The study, impact of cashless economy in nigeria, focused on the three major categories by which nigerians can be divided traders, students and civil servants. Effects of cashless economy policy on financial inclusion in. This article examined development and challenges of cashless policy in. Cbn cashless policy aims at reducing the amount of physical cash coins and notes circulating in the economy and encouraging more electronicbased transactions payments for goods, services. The main reason for the policy was to reduce the amount of. This makes the country to be heavily cash based economy.
The nigeria economic report will also be a vehicle. Central bank of nigeria the cashless nigeria project. It is ranked as the 27thlargest economy in the world in terms of nominal gdp, and the 22ndlargest in terms of purchasing power parity. To what extent will the effective performance of business transactions be affected by the policy of cashless economy in nigeria. The economy of nigeria is a middleincome, mixed economy and emerging market, with. The central bank of nigerias cashless policy in nigeria. Background the advancement of information technology has facilitated innovation in electronic payment where goods and services are traded without the use of physical cash. This study aims to look at the impact of cashless economy in nigeria. Policy development facility phase ii pdf ii is a flexible, rapidresponse facility set up to support champions of change in implementing economic and social policies that help reduce poverty in nigeria. The study examines the effect of adopting cashless payment on economic growth and development of the developing countries.
The paper examined the effect of cbns cashless policy on nigeria economy. The impact of cashless policy on the economic growth of nigeria, free undergraduate project topics, research materials, education project topics, economics project topics, computer science project topics, hire a data analyst. Specific objectives of the study is to examine the impact of the cashless policy on economic growth of nigeria. This study titled central bank of nigeria cashless policy and nigeria economy a study of cbn enugu intends to drive development and modernization our payment system in line with nigeria s vision 2020. A cashless payment eliminates the usage of money as a medium of exchange for goods and. Learn more about the nigeria economy, including the population of nigeria, gdp, facts, trade, business, inflation and other data and analysis on its economy from the index of economic freedom. The impact of central bank of nigeria cashless policy in nigeria economy. Africas quest for a cashless economy gains momentum. That policy will help modernize nigeria s payment system, says gsma. Nigerias economy has tended to suffer following an oil price crash, although its resilience has improved in more recent times see box 1. Previous economic policies left the country illprepared for the recent collapse of crude oil prices and.
The central bank of nigeria cbn cashless policy and the. Force people to convert their savings into consumption andor investment, thereby providing a boost to gdp and employment. This is because the central bank of nigeria has reintroduced its cashless policy which stipulates a cash handling charge on daily cash withdrawals that. Nigerias economy expands for the fifth quarter in a row. Sc department of banking and finance, university of nigeria nsukka abstract. Further, appropriate infrastructures such as improvement on the power sector should be made to enhance the smooth operation of the policy. Each report will provide an assessment of the current economic situation in the country and give special attention to selected topics of high policy relevance for nigeria. Abata, matthew adeolu department of accounting and finance, faculty of management sciences, lagos state university, ojo, lagos, nigeria dr. The policy aims at shifting the nigerian economy from a cashbased economy to a cashless one, with a view to among others, achieving the requirements of nigerias.
Analytically, this study employs descriptive statistical to highlightsoverview the effectiveness of the cashless policy of the cbn in nigeria. Babajide, isibor areghan akhanolu and okafor tochukwu. The banks were directed to put a hold on these charges until a directive is given by the cbn. The nigerian economic report ner is a regular publication of the world bank. Hence, any policy that promotes cashless payment will not affect the economy immediately. Nigeria is primarily a cash economy but the cbns cashless policy on withdrawals and deposits in banks is aimed towards reducing the amount of physical each and encouraging more electronicbased transactions in payments for goods, services and fund transfers. The paper examines the cashless policy of the central bank of nigeria cbn introduced in 2011, and on april 1, 2012 it commenced operation in lagos as a pilot project. The first issue in the cashless economy is the issue of electronic purse. Using electronic banking as a platform, the cashless policy was introduced to further deepen the financial market microstructure. Effects of cashless economy policy on financial inclusion. This study examines the implications of cashless banking, with a view to exposing the possible challenges and prospects it poses to the nigerian economy whilst employing aggregated approach.
Through the help of the cashless policy, financial transactions are initiated and completed without the need for cash. D department of accountancy, university of nigeria nsukka. Section 5 and 6 highlights the expected benefits and the challenges facing the cashless policy in nigeria and section 7 discusses the policy implications of cashless banking in nigeria. A cashless economy is an environment in which money is spent without being physically carried from one person to the other. This study is poised to investigate and appraise to the best of the researchers ability the impact of the cashless economy policy on nigerian citizens and the economy at large.1021 214 1058 205 940 1319 1105 158 1150 932 1379 1502 509 1457 140 1554 493 1460 66 49 350 1103 231 615 1538 1054 327 1209 38 321 638 25 1545 249 501 1400 1442 425 995 740 1303 929 929