Assessment of CBN Cashless Policy (Electronic Payment System) on Economic Growth in Nigeria

Abstract

Purpose: The objective of this study was to examined the effect of electronic payment systems on economic growth in Nigeria from 2012-2022, the relationship between real GDP and electronic payment systems and its impact on business growth in rural areas. Theoretical framework: The conventional wisdom in the field of growth economics is that the only path to long-term, sustainable development is an increase in productivity achieved via technical advancement. Previous literatures provide a linkage between e-payment and growth (Ravikumar, 2019). However, there is still much to investigate and learn about nexus between electronic payment and economic growth in Nigeria in recent development. Design/methodology/ approach: The data analysis method uses the Autoregressive Distributed Lagged Regression (ARDL) Method Covering the Period of 2012–2022. The data collection technique is carried out through a questionnaire administered to respondents across the six geopolitical zone. The data for the e-payment statistics was obtained from the quarterly and annual report of Central Bank of Nigeria statistics (2022) and the data for the real gross domestic product was obtained from the Central Bank of Nigeria Statistical Bulletin (2022). Findings: The results of ADRL indicate positive and direct relationship between real GDP and electronic payment systems with a significant impact on business growth in rural areas. The short-run analysis using the vector error correction model showed the short-run relationship and convergence of the variables real GDP, the value of POS transactions, the value of ATM transactions, the value of mobile transactions, and the value of internet transactions to the long-run equilibrium position. Research, Practical & Social implications: the result of this study showed that e-payment systems have a positive and direct relationship with economic growth, but it does not significantly contribute to economic growth in Nigeria. Originality/value: E-payment systems and security investment have a good association with economic growth, which means that if the government prioritize technology and internet infrastructure to make e-payment channels easier and cheaper for the public, it will amount to economic growth vis-à-vis development in Nigeria.