ABSTRACT

This study examined impact ofcashless policy on financial sector in Nigeria within the sample period of 2003-2016 The data for this research work was obtainedfrom the CBN Statistical Bulletin (2013) and analysed using ordinary least squares (OLS) technique financialsector output was regressed on Automated Teller Machine (A TM), Point on Sale (POS), Mobile Banking (MBK). Some econometrics tests were conducted such as Unit Root test, Cointegration tesj and Error Correction Model. The unit root test indicates that none ofthe variables was stationary at level but atfirst differencing all the variables became stationary. The Cointegration test revealed that the variables have long run relationship with economic growth ofNigeria within^ the sample period. The ECMrevealed that the explanatory variablesjointly influence the dependent variable, as shown by the f-statislics which had a p-value less than the 0.05 level ofsignificance. The R2 gave a goodfit ofthe regression result as the coefficient was 0.71; his shows that 71% ofthe fluctuations in gross domestic product are as a result ofthe changes in the explanatory variables. The Breusch-Godfrey Serial Correlation LM Test revealed that there was no autocorrelation among the series. Based on thisfinding the research recommends among others; there is the need for local sourcing of raw materials and input through agriculture should be intensified. A technological policy aimed at developing a local engineering industry is advocated. By so doing, the link between agriculture and the industrial sector will be established, leading to expansion of export base which would attract more foreign exchange into the country. This could culminate into high external reserves build-up and reduce adverse pressure on balance ofpayment.