Greener journa l of internet, inf ormation and com munication sy stems vol. Pdf this paper studied the impact of cashless policy in nigeria. A key regional player in west africa, nigeria accounts for about half of west africas population with approximately 202 million people and one of the largest populations of youth in the world. This study examined the extent to which variations in money supply had been and can be used to influence output in nigeria. The nigerian economy has been plagued with several challenges over the years. Nigeria is largely a cashbased economy with large percentage of funds residing outside the banking sector 66% as against the developed world where the money in circulation is for example 4 percent in us and 9 percent in u.
It is a known fact that the financial sector reform is an essential ingredient in the economic growth and developmental process of every nation. By some measures, nigerias economy ranked among the most volatile in the world for the period 1960 to. Severe instability, interventionism and corruption will be major obstacles to economic development over 202024. In spite of many, and frequently changing, fiscal, monetary and other macroeconomic policies, nigeria has not been able to harness her economic potentials for rapid economic development ogbole, 2010. The model, which was an aggregated, sparsely captures all the interplay in the real sector due to the complexity in the workings of the economy. A major policy implication of this result is that concerted effort should be made by policy makers to increase the level of output in nigeria by improving productivitysupply in order to reduce the prices of goods and. Sc department of banking and finance, university of nigeria nsukka abstract. Empirical studies about financial inclusion remain vital, especially in developing countries like nigeria, where little research studies have been. Subsaharan africa region fdi indicators south east asia 35 no. In the 1960s, nigeria was on a par, in terms of aspirations to attain a very high level of economic growth and development, with its fellowoil producing and exporting countries such as malaysia and indonesia, but has since failed to keep pace with them. Central bank of nigeria the cashless nigeria project.
Effects of cashless economy policy on financial inclusion. An analysis of cashless policy implementation in nigeria. Hence the financial sector is regarded as the pivot of every economy. The effect of devaluation was salutary as nigerias foreign exchange reserves grew by 773. Nigeria economy gdp, inflation, cpi and interest rate. Managing the transition to a cashless economy in nigeria. Monetary policy is the regulation of the money supply. Nigeria economic growth after only gradually recovering from the 2016 recession, the economy is set to contract again this year.
The energy sector is the driving force of nigerian economy. Cashless economy, cyber fraud, ebanking, point of sales. Nigerias economic recovery continues to be hampered by structural bottlenecks in the economy. Effect of inflation on the growth and development of the. The impact of the cashless policy on economic growth of. Nigerias economy has tended to suffer following an oil price crash, although its resilience has improved in more recent times see box 1. Online transaction systems have increasingly become a necessary component of business strategy and a strong catalyst for achieving cashless economy and economic development. Corruption affects public finances, business investment as well as standard of living. Executive summary corruption is a pressing issue in nigeria. Nigeria economy, politics and gdp growth summary the. The main reason for the policy was to reduce the amount of. Overview of the nigerian economy african development bank. Given the seminal role of smes to the economy of nigeria.
This first nigeria economic report will give some attention to longer term trends in the coun. This article examined development and challenges of cashless policy in. Toward the cashless economy in africa mastercard newsroom. In 2008, the central bank of nigeria developed a macroeconometric model of nigeria to assist the bank in policy analysis. A major reason that has been responsible for her socioeconomic stagnation is the phenomenon of corruption. President muhammadu buhari launched an anticorruption drive after taking office in may, 2015. Fiscalmonetary policy and economic growth in nigeria. Department of economics, banking and finance, babcock university, ilishan remo, ogun. The nigeria economic report will also be a vehicle for the dissemination of existing world bank studies that are deemed to be of particular relevance for nigeria. Preface why the central bank of nigeria made the cashless policy.
D department of accountancy, university of nigeria nsukka. Effect of cashless monetary policy on nigerian banking. 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 new classical framework for the explanation of the current economic crisis is. It is ranked as the 27thlargest economy in the world in terms of nominal gdp, and the 22ndlargest in terms of purchasing power parity.
The nigerian economic report ner is a regular publication of the world bank. 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. Effects of cashless economy policy on financial inclusion in nigeria. Nigeria is sub saharan africas largest economy and relies heavily on oil as its main source of foreign exchange earnings and government revenues. Enable the adoption of new wirelesscashless technologies. This makes the country to be heavily cash based economy. Getting the policy response right matters as falling economic growth imposes a real human cost on the population. Early in the forecast period nigeria will be in a state of nearstagflation, with tight credit conditions, low growth, rising unemployment and high inflation mainly policy induced. Nigeria, a country richly endowed with natural resources and high quality human capital is yet to find its rightful place among the comity of nations. Cashless policy and economic activities in developing. After independence, the nigerian economy seemed very promising. Decock1998 defines a central bank as a bank which constitute the apex of the monetary and banking structure of a country and which performs as best as it can be in the national economic interest the following functions of regulations of.
The impact of monetary policy on the economic growth of. Nigerian economy will struggle to realise growth much higher than 4. Department of economics, banking and finance, babcock university, ilishan remo, ogun state, nigeria 2. The impact of the cashless economy policy on nigerian. This is clearly underscored in the literature linking the growth in financial sector with national economic growth. Force people to convert their savings into consumption andor investment, thereby providing a boost to gdp and employment. Chapter one on nigerias social and political issues. In other words, the study examines how cashless policy based on some selected factors lead to financial inclusion in nigeria. Africa, nigerias external debt stock follows an upward pattern over the years while the former is relatively stabilized ayad and ayadi, 2008. The cashless payment system as a panacea to the national. Colonialism is a major feature of the economic history of nigeria.
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. The economic effect of money laundering in nigeria is enormous. Pdf impact of cashless economy in nigeria researchgate. Substantially constrain the parallel economy, particularly in illicit activities.
The crisis, which has ravaged many economics around the world has caused noticeable imbalance in nigeria. The apex financial institution in any economy is the central bank of that country and it plays a major role in the economic advancement of that nation. Welfare effects of taxation on the nigerian economy. The political, economic and social dynamics of nigeria. Outside of transportation and, perhaps, a small section of the industrial sector, the petroleum economy has very little linkage with nigerian. The policy was introduced by central bank of nigeria cbn in december 2011 and was. The impact of central bank of nigeria cashless policy in. A cashless economy simply illustrates a gradual or a radical movement of the. 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.
Nigerias phase1 privatisation programme 198893 was deemed successful with. Nigeria is a multiethnic and culturally diverse federation which consists. Pdf on oct 1, 2016, ordu monday matthew and others published cashless economic policy in nigeria. However, the cost of cash to nigeria financial system is high and increasing. On 1st january, 2012, nigeria commenced the implementation of cashless policy. The economic reforms and prudent policies have contributed to the consolidation of. It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting.
Following the 200809 global financial crises, the banking sector was effectively recapitalized and regulation enhanced. Political leadership and corruption in nigeria since 1960. 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. The impact of central bank of nigeria cashless policy in nigeria economy. In a developing economy such as nigeria, financial sector development has been accompanied by structural and institutional changes and the sector generally has long been recognized to play a crucial role in the economic development of the nation.
The crisis started with the us mortgage default cumulated to the system wide credit collapse and finally to the collapse of the global economy. The country is the largest oilproducing country in africa, and in the. Pdf effects of cashless economy policy on financial. Many saw nigeria, with 15% of africas population, as an emerging economy. Each edition of the ner includes a macroeconomic overview and gives special attention to an additional topic of high policy relevance. The attempt to restructure the economy through privatisation is currently at a snails pace. This is the way to ensure sustainable growth and development of the nigeria economy. This paper discusses the global financial crisis and nigeria economy. Nigeria recently changed its economic analysis to account for rapidly growing contributors to its gdp, such as telecommunication, banking and its film industry, as a result of this statistical revision, nigeria has added 89% of its gdp, making it the largest african economy.
Britain eventually gained control of nigerian administration. The paper discussed the effects of cashless policy on the nigerian economy, how it was kick started in lagos, means of payments both. Smes in nigeria in nigeria, empirical report shows that an estimate of about 70% of the industrial employment is held by smes and more than 50% of the gross domestic product is smes generated odeyemi, 2003. Nigeria being a primarily cash based economy continues to see a rise in the cost of. To drive development and modernization of our payment system in line with nigeria s vision 2020 goal of being amongst the top 20 economies by the year 2020. Effectiveness of naira devaluation on economic growth in. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000.
Effects of money laundering on the economy of nigeria. We need to address the infrastructure and policy conditions that are currently strangulating the real and services sectors of the economy. Nigerias revealed rebased gdp figures for 20 showed 89% jump in. Cashless payment and economic growth financial innovation. The benefits of adoption of cashless economy include reduction in corruption and. The economy of nigeria is a middleincome, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. Recently, the cbn came out with two laudable agenda the islamic banking noninterest banking and the cashless economy epayment systembabalola,2008. Nigeria, as one of the developing countries, is lacking behind in reaching. 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. In nigeria as it is in many developing countries, cash is the main mode of payment. In november the central bank 2014, of nigeria cbn among other things moved the bench mark interest rate called monetary policy rate from 12 to per cent, and. Since then, nigerias economic growth has been driven by growth in. An efficient and modern payment system is positively correlated with economic development, and is a key enabler for economic growth.
Since the declaration of cashless economy policy by the central bank of nigeria, many scholars have written on this subject matter. The cbn and pro cashless policy activists have asserted reduction in crime rates, minimized risk associated with carrying huge sums of money, reduction in political corruption, reduction in banking cost, improvement on monetary policy in management of inflation and the overall growth and development of the economy of nigeria as advantages. The challenges and strategies nigeria computer society ncs 24th national conference speaker. Cashless economy and financial statement reporting in nigeria emengini, steve emeka ph. The collapse in crude prices may hinder domestic production, battering fx and fiscal revenues and adding pressure to the. South african economies are good examples in this regard with the former recorded as being in the inception stage and south africa in a. That the turmoil in the global economy has taken a toll on the nigerian economy is no longer a matter of contention.
1359 1531 289 855 1385 1486 732 298 1377 317 319 358 990 1581 793 884 1341 568 200 1035 138 1032 1547 81 917 183 1382 1078 927 129 645 1266 595 1046