In addition, the policy aimed to reduce costs related to banking and facilitate the progression of monetary policy decisions and. The impact of federal government tax policies on the nigerian economy, is determine whether the federal government tax policies in nigeria has contributed immensely to the overall growth of the economy. The impact of monetary policy on the economic growth of nigeria. According to cbn, the new cash policy was introduced for. But, mismanagement of the economy, lack of public accountability, insensitivity of the leadership to the yearnings and aspirations of. By some measures, nigerias economy ranked among the most volatile in the world for the period 1960 to 2000 world bank, 2003. Preface why the central bank of nigeria made the cashless policy.
They advised that other policy measures and instruments are needed to complement monetary policy in macroeconomic stabilization. In nigeria as in many developing countries, cash is the main mode of payment thus making the economy heavily cash based. In essence therefore, this research is of the view that further investigation on this area in this moment of structural reform in nigeria will help the government with useful information based on the fiscal policy formulation measures. The impact of monetary policy on economic growth in nigeria investigates the role monetary policy variable in stabilizing the economy of nigeria. 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. This paper draws upon drawn on morgans theory of organisational bureaucracy to explore how the interconnections and alliances between bureaucratic mechanisms, and educational agencies can inform how educational policies fail in nigeria and the africa region. The three main policy objectives are the maintenance of national unity, the elevation of the living standards of the population, and the attainment of economic independence.
Table 1 shows the view of respond ents on benefits of cashless economy in nigeria. Monetary policy rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money. In recognition of this fact, managers of the nigerian economy have targeted the banking sector as a channel for implementing economic policy reforms and policy shift to enhance its developmental process. Nigeria economic growth after only gradually recovering from the 2016 recession, the economy is set to contract again this year. Director, monetary policy department, central bank of nigeria, p. Cashless economy is an economy where transaction can be done without necessarily carrying physical cash as a mean of exchange of transaction but rather with the use of credit or debit card payment for goods and services. Fiscalmonetary policy and economic growth in nigeria. The nigeria economic report will also be a vehicle. Nigerian economic policy dispute hinders chances of recovery. Government priority to education also fell considerably, while funding of higher education by the government declined very sharply okemakinde, 2010. 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. This makes the country to be heavily cash based economy.
Hence, class relation both within the ruling class and between the ruling and dominated classes in a peripheral economy like nigeria are highly fractious and antagonistic. How africas largest economy is prioritising affordable internet april 2014 the federal republic of nigeria is a regional and global powerhouse. Enable the adoption of new wireless cashless technologies. Lastly, it would provide policy recommendations to policy makers on ways to make the nigerian economy vibrant through the monetary policy.
The impact of the cashless policy on economic growth of nigeria. Following the 200809 global financial crises, the banking sector was effectively recapitalized and regulation enhanced. In 2005, the central bank of nigeria cbn took action to alleviate the economic impact of heavy cash use by issuing a cashless nigeria policy with objectives. Effects of cashless economy policy on financial inclusion in nigeria. 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. Since nigeria gained her independence in1960, there have been different constitutional reforms, change in economic and banking policies mainly aimed at stabilizing the economy, enhancing social welfare and. Nigerias economic recovery continues to be hampered by structural bottlenecks in the economy.
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. Nigeria economy gdp, inflation, cpi and interest rate. According to cochran 2015 policy comprises political decisions for implementing programs to achieve societal goals. Monetary policy and its effectiveness on economic development. The economy of nigeria is a middleincome, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. It has been argued however, that the present situation in nigeria is a. However, the cost of cash to nigeria financial system is high and increasing. Educational policy in nigeria from the colonial era to the. Force people to convert their savings into consumption andor investment, thereby providing a boost to gdp and employment. Introduction nigeria being an import dependent economy is faced with stagnated growth, unstable business cycles and economic fluctuation. The nigeria economic report represents a new world bank product intended to be produced on a biannual basis.
This paper examines the cashless policy in nigeria and its socioeconomic impact on small scale businesses. Based on the foregoing issues at hand, the main aim of this study is to conduct an appraisal of the effects of cashless economy policy on financial inclusion in nigeria. The main reason for the policy was to reduce the amount of. There is a widened western educational gap between the north and south of nigeria with the predominantly muslim areas of the north lagging behind due to some. Nigerias economy has tended to suffer following an oil price crash, although its resilience has improved in more recent times see box 1. A cashless economy is an environment in which money is spent without being. We simply used descriptive statistics to show contribution of government fiscal policy to economic growth, and to ascertain and explain growth rates, and an ordinary least square ols in a multiple form to ascertain the relationship between economic. Cashless policy could often be affected by physical challenges such as high rate of illiteracy, inadequate sensitizationeducation of the benefits of cashless policy, and inadequate logistics such as the provision of internet connections in commercial areas, computers and point on sale pos machines. D school of management sciences national open university of nigeria abstract the role of fiscal policies in the development of emerging economies has been a major source of concern in economic literature. Therefore, nigerian banks should utilize the benefits of the cashless policy and engage in efficient financial intermediation for enhanced bank profitability. Monetary policy refers to combination of measures designed to regulate the values, supply and cost of money in an economy in consonance with the level of economic activity folawewo and osinubi, 2006. Sustained political will and eradication of corruption are necessary for effective policy implementation. However, the policy was an offspring of the indigenisation policy at the time.
Educational policies and problems of implementation in nigeria. Policy implementation and its challenges in nigeria effiong, a. 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 impact of central bank of nigeria cashless policy in nigeria economy. However these high levels of economic growth have not translated to. In a cashless economy, little or very low cash flow is permitted. So, hope that now you know a little bit more about the structure of the nigerian economy and major sectors of the nigerian economy. The foreignpolicy orientations of nigeria 63 the nigerian approach to panafricanism 63 nigeria and the united nations 65 prowestern nonalignment 65 postwar perspectives 66 the nigerian economy and the natural resources 69 general development of the nigerian economy 69 development plans 76 agriculture, forestry and fisherles 78. An analysis of cashless policy implementation in nigeria. In recent years, nigeria has been experiencing a growth. Nigerias fiscal policy has affected the economy with emphasis on the impact of various components of public expenditure on the economy. The nigerian economic report ner is a regular publication of the world bank. Aug 28, 2016 the impact of the cashless policy on economic growth of nigeria. Effects of cashless economy policy on financial inclusion in.
It is in this regard that the central bank of nigeria cbn introduced the cashless policy with the objective of promoting. Cashless policy and economic activities in developing. Effects of cashless economy policy on financial inclusion. Okoroma educational policies and problems of implementation in nigeria 245 provision of qualitative education should be made compulsory and entrenched into the constitution in order to encourage resultoriented implementation. Further, appropriate infrastructures such as improvement on the power sector should be made to enhance the smooth operation of the policy.
In 2015, the central bank of nigeria issued a notice to all banks that began collecting charges on withdrawals above the threshold in the remaining 30 states. The private sector of the economy consists partly of a multitude of. Policy options for nigerias economic crises vanguard news. Studies by agiobenebo 2003 gbosi 2002 and okowa 1997 indicate that the economy is still married by chronic.
In comparison with previous years, nowadays nigeria sector of banking services is flourishing. The banks were directed to put a hold on these charges until a directive is given by the cbn. The crux of this study is on the adoption of epayment system in nigeria. 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. Fast tracking the implementation of government policies through the elimination of. The policy was introduced by central bank of nigeria cbn in december 2011 and was. The empirical result showed that the effect of monetary policy is stronger than fiscal policy and the exclusion of the degree of openness did not weak this conclusion.
This paper discusses the challenges of nigerias economy problems, causes and the way forward. Substantially constrain the parallel economy, particularly in illicit activities. This article aims at determining the impact of various components of fiscal policy on the nigerian economy. The nigeria economy has experienced robust gdp growth rates over the reform period 2000 to 2010. Pdf effects of cashless economy policy on financial. Policy denotes what governments do, why they do it, and what difference does it make dye, 1995. The benefits of adoption of cashless economy include reduction in corruption and. The paper examined the effect of cbns cashless policy on nigeria economy. The goals of higher education in nigeria as contained in her national policy on education npe are with a view to making higher education meet the needs of the country, at least in policy. Nigeria is not enjoying price stability in the least. Nigerian private sector begins to play more and more active role in the sphere of services. The impact of central bank of nigeria cashless policy in. Economic outlook 3 contents theme 1 oil prices still lower for longer theme 2 economy growth gets a boost from high oil prices theme 3 inflation declines sharply, driven mainly by base effects theme 4 monetary policy rate set to fall, and then rise theme 5 governments fiscal deficit expands above budget. Nigeria has a population of 3 million, a landmass of 923,768km2, a bountiful endowment in arable land, solid minerals and petroleumgas resources.
Pdf returns of the cashless policy in nigeria mpho. 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. Pdf impact of cashless economy in nigeria researchgate. Sep 26, 2016 a dispute between nigerias monetary and fiscal policy makers over how to lift the economy out of its worst slump in more than two decades may delay a recovery in africas most populous country. At a 2day nigeria meeting organized by the overseas development institute, london, 1617 june 2004 contact. Policy successive administrations have described the u. The economic system is based upon planning but accords an important role to private enterprise.
In other words, the study examines how cashless policy based on some selected factors lead to financial inclusion in nigeria. The policy was introduced in nigeria by the central bank of nigeria cbn in december 2011. The paper discussed the effects of cashless policy on the nigerian economy, how it was kick. Monetary policy and its effectiveness on economic development in nigeria author. An empirical trend analysis onyemaechi joseph onwe, ph. Each edition of the ner includes a macroeconomic overview and gives special attention to an additional topic of high policy relevance. Monetary policy, growth, development, optiaml rate, foreign investment created date. The introduction of the cashless policy in march 2012 aimed to drive development and advance payment systems in nigeria. 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 measurable benefits to the economy. 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. Consequently, in january 2012, such economic reform in the nigerian financial sector was exercised with the.
Given the policys objectives, the paper xrayed the associated benefits of the policy. Central bank of nigeria the cashless nigeria project. The attempt to restructure the economy through privatisation is currently at a snails pace. Each report will provide an assessment of the current economic situation in the country and give special attention to selected topics of high policy relevance for nigeria. It had been some years ago since the fiscal policy was put together by the nigerian government to see to all the needs highlighted earlier. The country has just overtaken south africa to become africas largest economy, and. Monetary policy uses a variety of tools to economic growth, inflation, exchange rates with other currencies and unemployment. Pdf this paper studied the impact of cashless policy in nigeria.
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. Monetary policy on economic growth in nigeria 19812016. It is ranked as the 27thlargest economy in the world in terms of nominal gdp, and the 22ndlargest in terms of purchasing power parity. Section 12 subsections 1 to 5, cbn act of 2007 ammended. The government will however be able to achieve the desired goal if some controls can be maintained on the currency.
Nigeria is primarily a cash economy but the cbns cashless policy on withdrawals and deposits in banks is aimed towards reducing the amount of physical each and encouraging more electronicbased transactions in payments for goods, services and fund transfers. The implementation of fiscal policy is essentially routed through governments budget. Nigeria has been going through a lot of economic problems in the recent years. In nigeria as it is in many developing countries, cash is the main mode of payment. Overview of the nigerian economy african development bank. Bank monetary policy could be an effective tool to encourage investment, reduce unemployment, reduce lending rate and stabilize the economy of nigeria.
The recent evolution of technology for financial transactions poses interesting questions for policy makers and financial institutions regarding the suitability of current institutional arrangements and availability of instruments to guarantee. Www browsing, file download, virtual private networks and remote system. Enquiries concerning this publication should be forwarded to. Public disclosure authorized nigeria economic report. Policy implementation and its challenges in nigeria. Based on the forego ing issues at hand, the main aim of this study is to conduct an appraisal of the effects of cashless economy policy on financial inclusion in nigeria. Specific objectives of the study is to examine the impact of the cashless policy on economic growth of nigeria. Scope of the study the economy is a large component with lot of diverse and sometimes complex parts. The legal backing for monetary policy by the bank derives from the various statutes of the bank such as the cbn act of 1958 as amended in cbn decree no. Public policy comprises a plan of action or program and a statement of objectives, in other words, a map and a destination.
In addition, the lofty place of fiscal policy in the management of the economy, the nigeria economy is yet to come on the path of sound growth and development. The central bank of nigeria cbn is the central bank and apex monetary authority of nigeria. It is not a gainsaying that if nigeria is to meet up with the demand of manpower in the modern world of advanced economy, successful and productive. Nigeria has the appropriate credentials for greatness.
Cashless nigeria the central bank of nigeria cbn has introduced a new policy on cashbased transactions which stipulates a cash handling charge on daily cash withdrawals that exceed n500,000 for individuals and n3,000,000 for corporate bodies. Babajide, isibor areghan akhanolu and okafor tochukwu subject. Little wonder why the central bank of nigeria recently introduced a. Ordinarily, the object of economic policy is to improve the welfare of the people, either in the shortrun or the long run. Cashless policy in nigeria and its socioeconomic impacts. Ineffective leadership and corruption, over reliance on oil, inflation, unemployment, government policy, monetary policies, inadequate. Nigerias aim to be among the biggest economy by 2020 has driven her to gradually move from a pure cash economy to a cashless policy.
Economic policy is the actionstatement of the government pertaining to particular sectors of the economy, describing the intended objectives and how to achieve them. Since then, nigerias economic growth has been driven by growth in. Policy congressional research service 1 overview nigeria is considered a key power on the african continent, not only because of its size, but because of its political and economic role in the region. It prescribed a cash handling charges on daily withdrawal above five hundred thousand naira n500,000.