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The Impact of Cashless Policy Tools on Money Circulating Outside Nigerian Banks

, Alhassan Haladu
State-of-the-Art Theories and Empirical Evidence pp 227-238; doi:10.1007/978-981-10-6926-0_14

Abstract: Monetary and fiscal policies aimed at improving an economy’s performance are worth any trial. The Nigerian government’s move to implement the cashless policy (CLP) in 2012 was just a step in this direction. This research is embarked upon to assess the pre-and post-implementation period of Nigeria’s CLP with focus on the relationships between tools of CLP and currency outside banks in the Nigerian economy. Focusing on the entire economy, data for the period 2009–2012 was regressed through OLS to test for the impact of these tools on currency circulation in the economy. The results showed a high level of collinearity and perfect fitness, thus making it impossible to compute the influence on COB. On considering only two of the variables (ATM and CHQ), it was discovered that a positive insignificant relationship exists on the predictive relationship. This insignificant relationship could be attributed to the period under observation. Majority of the period observed by the study covers the preimplementation period (2009–2011), while only 1 (2012) post-implementation period was studied. Since ATM and CHQ have insignificant influence in a perfect fitness situation, then it can be concluded that CLP tools do not affect currency circulation outside Nigerian banks. It is, however, recommended that an equal period of pre- and post-implementation (2009–2014) be covered if an acceptable consensus is to be arrived at.
Keywords: Cashless policy (CLP) / Automated teller machine (ATM) / Web-based transactions (WEB) / Mobile banking transaction (MBT) / Point-of-sale (POS) / Cheques (CHQ) and currency in circulation (CIC) or currency outside banks (COB)

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