Understanding the Technologies for Cashless Economy on Nigeria’s GDP Growth: Post COVID – 19

Abstract

Purpose: Nigerians faced some challenges regarding the conventional commercial practices of incompatible and nonconvertible currencies that restricted payments while trying to unlock the commercial potentials of the expanding market place during the lockdown of the COVID-19 pandemic. This raises great fear about the impending loss to the GDP as critics have maintained that electronic replicas of the conventional payment instruments received low patronage because they are not well suited for the average citizen as the speed required in e-commerce purchase processing are too slow for micropayments; and the high transaction costs involved in processing them also add greatly to the overhead. This has motivated this study to investigate the frequency of electronic payments made during the COVID 19 lockdown in Nigeria and its impact on the GDP.

Design/Methodology/Approach: To achieve this, we first synthesized papers from World Bank reports, Central Bank of Nigeria (CBN), and the European Central Bank, (ECB). The study then adopted a descriptive survey research design with sample size of 224. Purposive random sampling was used to select 12 electronic payment channels. Data was collected using a structured questionnaire as well as sources from the CBN bulletins and statistics. The Data collected through the questionnaire was analysed using mean whereas data collected through CBN bulletins and statistics was analysed using Gretl Econometric software and SPSS version 2.0. In testing the hypotheses T-Test for paired samples was employed. Estimation of GDP growth was done using the OLS multiple regression model. However, throughout the literature, we try to portray a constructive relationship between the use of the 12 electronic payment channels studied and their relationship to GDP growth.

Findings: The findings reveal that electronic payment system significantly positively contributed to economic growth in terms of real GDP per capita during the COVID – 19 lockdown more than other years. The findings also show that NIP contributed highest to GDP growth while M-CASH channel contributed the least.

Originality/Value: The paper contributes in investing the frequency of electronic payments in lockdown of Nigerian people and their impact on country’s GDP. The results of the study are based on the quantitative analysis of primary data and robust statistical analysis is used to justify the relevance and framed objectives of the study

Paper Type: Empirical Research Paper