IMPACT OF CASHLESS BANKING POLICY ON THE ECONOMIC GROWTH OF NIGERIA (2010-2018)

Abstract

The battle for efficient and effective financial payment system in Nigeria dated back to 1894 when British Bank for West Africa (BBWA) successfully managed, circulated and distributed the British silver coins as a means of settlement of trade transaction and debts in the British West Africa colonies. Since then the system has undergone several changes with the hope to get it right. In December 2011 a cashless banking policy was implemented by the Central Bank of Nigeria (CBN). The policy aims at reducing the use of cash and encouraging more electronic based transaction with a view to meeting the requirements of Nigeria’s vision 20:2020 transformation agenda. This study therefore was carried out to evaluate the impact of cashless banking on the economic growth of Nigeria. The research design adopted for this study is the ex-post facto research design. Analysis of data was done using ordinary lease square (OLS) regression analysis. The results revealed that there is a significant relationship between internet banking and economic growth in Nigeria. The reason could be deduced from the fact that most Nigerian investors do use their telephone lines for transaction activities. This product has also experienced relatively high patronage due to adequate bank awareness and education of the customer on how to maximally use their phone to transact simple banking operations, and as a result has contributed immensely to Nigeria’s banking sector growth. The study further revealed that there is a significant relationship between internet banking and economic growth in Nigeria. The reason could be attributed to the fact that most Nigerian investors make use of their telephone lines for transaction activities, and as a result has contributed immensely to Nigeria’s banking sector growth. Therefore, it was recommended that the citizens and the government should be sensitized and educated periodically on the positive impact of the policy as well as encourage different methods on promoting cashless banking in Nigeria.