The Effect of Cashless Policy on Economic Growth in Nigeria: An Autoregressive Distributed Lag Approach

Abstract

The study investigated the effect of cashless policy on economic growth in Nigeria using quarterly time series data spanning through the period of 2012 to 2021 while the research design adopted for the study was the ex-post facto research design. Diagnostic test such as serial correlation, heteroskedasticity and Cusum test were conducted. Phillip-Peron and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) were used to carry out unit root test on the variables while the Auto-Regressive Distributed Lag (ARDL) was used for the data analysis. The findings revealed a significant relationship between Cheque (CQ) and Internet banking (IB) with the Gross Domestic Product while the relationship between the Automated Teller Machine and the Gross Domestic Product is negatively insignificant. The study concludes that cashless policy influences economic growth in Nigeria and therefore suggests that the Central Bank of Nigeria should encourage Banks to offer quality ATM services to their customers. This is expected to boost the adoption of alternative payment system which is amongst the rationale for introducing the cashless policy.