The Impact of Cashless Economy on Inflation and Corruption in Nigeria

Abstract

The effects of a cashless economy on inflation and corruption in Nigeria were the focus of this research. The statistics Bulletin published quarterly by the Central Bank of Nigeria (CBN) provided the study's data, which covered the time period from 1990Q1 to 2021Q4. The unit root test was performed on the formulated model using the Augmented Dickey Fuller (ADF) method. The variables were found to be non stationary at levels but stationary after first difference, as shown by the Augmented Dickey Fuller unit root test. To determine whether the variables are related over the long run, the Johansen method of co-integration was used. The findings demonstrated a long-term correlation between the factors. Further findings showed that the use of automated teller machine does not lessen corruption perception index and inflation rate in Nigeria but is statistically significant in the long-run. Point-of-sale systems, however, showed promise as a practical technique for lowering corruption perception index and inflation rate. A positive and statistically significant association exists between mobile banking and inflation rate, whereas the adoption and implementation of mobile banking will decrease the corruption perception index but is inconsequential in the long term. Finally, it has been observed that check transactions cut inflation over the long term while also having a positive and statistically insignificant link with the corruption perception index. To further decrease cash transaction in the nation, it was suggested that the monetary policy authority (CBN) expand the number of point of sale terminals. As a result, corruption and inflation will decrease along with the amount of currency in circulation (inflation rate).