Effect of Cashless Policy on the Nigerian Economy

Effect of Cashless Policy on the Nigerian Economy

CHAPTER ONE

OBJECTIVES OF THE STUDY

The general objective of this study was to examine the impact of Cashless policy on Nigerian economic growth. However, the specific objectives were:

(i) To determine the degree of the relationship between cashless policy and Nigerian economy.

(ii) To ascertain empirically the impact of cashless policy on Nigeria economic growth.

CHAPTER TWO

LITERATURE REVIEW

Introduction

This chapter deals with the review of related literature. The review was discussed under the following subheadings: concept of a cashless society, concept of economic growth, concept of economic development, concept of CBN cashless policy in Nigeria and theoretical framework.

Conceptual review

Concept of cashless economy

A cashless economy is an environment in which money is spent without being physically carried from one person to the other. The first issue in the cashless economy is the issue of electronic purse. This is electronic information that is transmitted to a device which reveals the information about how much a person has stored in the bank and how much he can spend.

The advantages of a cashless economy are enormous; cost of transportation and the danger of carrying large sum of money about will possibly reduce. The policy, it is claimed by the makers, will enhance the integration of our economy as presently 78.8 percent of the country’s rural populations are largely unbanked. According to the CBN, this policy, when fully implemented therefore, will drive Nigerian’s huge informal economy which is driven by small scale farmers, traders, craftsmen and other types of small and medium sized businesses and eventually integrate it into the nation’s formal economy.

The move to use electronic cash, commonly dubbed “cashless” however, has its own challenges, which in Nigeria, appear to be accentuated by the perennial problem of inadequate physical and social infrastructure. The introduction of the policy in Nigeria therefore brings up issues that touch on security, privacy, crime and computerization. Societal acceptance of the policy is therefore critical to its sustenance or the tendency to rebel against it by the common man on the street becomes imminent. However, as the financial institutions have implemented such things as debit cards, credit cards, internet banking, etc, it has slowly brought society into the acceptance zone whereby another step could be taken. Without society being able to understand the pros and cons of electronic cash, the full benefit of the cashless society may never be realized.

The cashless policy will potentially result in an extensive application of computer technology in the financial system, as technologies are developing rapidly on the transfer of funds from one place to another. This places the Computer Professional Registration Council at the centre of control and regulation of the emerging technology in our economy.

It has been argued that cashless transactions are viable and more secured mode of payment in any economy. Currently, about 63.7 per cent of Nigerians do not have bank accounts but the new initiative would enhance banking habit among individuals, especially among the rural dwellers so that they can easily transfer money to their people wherever they might be.

CHAPTER THREE

RESEARCH METHODOLOGY

This chapter presents the design and methodology employed by the researcher for the purpose of conducting the research. The procedure for data collection and the relevant data used to address the research hypothesis.

RESEARCH DESIGN

According to Kerlinger (1986), research design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance. Thus, the research design that was adopted in this study was the Descriptive design. The adoption of this design was informed because the study involved the collection of data to accurately and objectively describe existing phenomena and determining the nature of a situation as it exists at the time of investigation population under investigation.

Furthermore, the decision to use the descriptive design was supported by Kerlinger (1986) who stated that descriptive research is probably best adopted to obtain personal facts, beliefs and attitudes. He remarked that the descriptive design has the advantage of covering a wider scope and at the same time economical. The design therefore was considered appropriate for the study a study into the acceptability and adoption of the policy in.

CHAPTER FOUR

DATA ANALYSIS AND PRESENTATION OF RESULTS

INTRODUCTION

This chapter is focused on data analysis and presentation of results. The data were analyzed and tabulated according to the research items in the questionnaire. The data in this study were analyzed using simple percentage and frequency counts, the hypotheses were tested using chi square. This chapter is discussed under the following sub-headings:

Analysis of Response Rate of the Respondents
Bio-data of the Respondents
Analysis of data on the research questions and presentation of results.
Hypotheses testing

ANALYSIS OF RESPONSE RATE OF THE RESPONDENTS

A total of two hundred and forty (240) copies of the questionnaire were administered to the respondents who are residents of . The researcher was able to retrieve all the two hundred and forty (240) copies of the administered questionnaire from the respondents.

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

CONCLUSION

In this study, our focus was to examine the effect of cashless policy on the Nigerian economy using banks in Abakaliki metropolis in Ebonyi State as a case study.. The study specifically was aimed at determining the degree of the relationship between cashless policy and Nigerian economy; and to ascertain empirically the impact of cashless policy on Nigeria economic growth.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 240 responses were validated from the enrolled participants where all respondent are active workers in the 8 selected banks in Abakaliki metropolis in Ebonyi State.

The findings revealed that Cashless policy relate to the Nigerian economy, and that Cashless policy has effect on the Nigeria economic growth.

RECOMMENDATION

On the strength of the findings and conclusions derived from this study, the researcher wishes to make the following recommendations:

Measures that will ensure that the reasons for the implementation of this policy are achieved should be put in place.
The relevant stakeholders should intensify their efforts in achieving a successful implementation of the cashless policy.
A major problem in the working of the cashless policy is internet related fraud. Nigeria is a major hub of electronic fraud and this can only be expected to increase as we march into the cashless economy. It is recommended that a country as large as Nigeria should have a signed law preventing cybercrime. Nigeria should make concerted efforts to design an internet security framework to check online fraud so that the public can be assured and protected against cyber-attack and fraud.
There is the need to intensify the public enlightenment programme about the cashless system so that everybody will be well acquainted with the system since it will affect everybody. Since there is a high rate of illiteracy, and all people must be brought into the system, the government should design special enlightenment programmes for the non-literates, using probably signs and symbols to educate this segment on how to operate the cashless system (post on sale vis-à-vis mobile phones)
The social infrastructural facilities should be adequately enhanced and maintained in order for success to be attained.
The adequate technological infrastructures sufficient enough to carry the whole country along with this policy should be put in place. Since the implementation of the policy is now nationwide, each states of the federation must have the facilities needed in adequate proportion in order to facilitate a wide acceptance and usage by Nigerians.
Relevant legislative laws curbing cyber crimes must be put in place by the initiators of this policy. This will create confidence in the mind of the masses.
Government should provide uninterrupted power supply and adequate communication link while shortfall should be covered by banks through back-up arrangement to power standby generator in case of power outage;
Government should also support banks in the aspect of financing the payment system which requires a lot of capital to maintain;
Government and the CBN should create awareness on the benefits derivable from cashless policy for the improvement of businesses and economic development;
Skilled manpower and computer experts should be employed by every bank to prevent fraud and hacking of banks’ data to steal customers’ fund;
Electronic payment system is capital intensive, therefore banks are encouraged to collaborate to finance some of the infrastructures needed for the smooth implementation of the policy by sharing cost to reduce the initial cost of setting up electronic banking;
Government should provide adequate security so as to create safe environment that will make people to imbibe the policy.

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