ASSESSMENT OF THE IMPACT OF POS BUSINESSES IN REDUCING UNEMPLOYMENT RATE IN ASABA

CHAPTER TWO

LITERATURE REVIEW

INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

Precisely, the chapter will be considered in two sub-headings:

• Conceptual Framework
• Chapter Summary

2.1 CONCEPTUAL FRAMEWORK

Unemployment

Unemployment can be defined as a situation in which people are willing to work at the prevailing rate of pay, but cannot find a job. Jhingan, M. L. (2001). However, he has categorized unemployment as frictional, seasonal, structural or cyclical in nature. Frictional unemployment refers to a situation when people are temporarily unemployed. This may arise due to changing labour force and jobs in an economy. Seasonal unemployment on the other hand refers to a situation when people lose their jobs due to the nature of jobs. Structural unemployment arises in an economy when all factors of production are committed to production of goods and services (full-employment). While, cyclical unemployment is caused as a result of changes in aggregate demand.

The major causes responsible for the persistence of unemployment in Nigeria include the following; slow growth of the economy, undiversified economic structure, inadequate infrastructure, Shortages of skilled personnel, inadequate capacity of vocational skills etc Balami (2006).

The problem of unemployment has in recent years aggravated the problem of poverty, political instability and insecurity in Nigeria. As such the provision of employment opportunities and eradication of poverty has been at the center stage of economic policy reform in Nigeria. For example the National Economic Empowerment Development Strategies (NEEDS) have job creation, poverty reduction and wealth creation as its major goals (National Planning Commission, 2004).

Unemployment, according to the OECD (Organisation for Economic Co-operation and Development), is persons above a specified age (usually 15)[2] not being in paid employment or self-employment but currently available for work during the reference period.

Unemployment is measured by the unemployment rate, which is the number of people who are unemployed as a percentage of the labour force (the total number of people employed added to those unemployed).

Unemployment can have many sources, such as the following:

• new technologies and inventions
• the status of the economy, which can be influenced by a recession
• competition caused by globalization and international trade
• policies of the government
• regulation and market

Unemployment and the status of the economy can be influenced by a country through, for example, fiscal policy. Furthermore, the monetary authority of a country, such as the central bank, can influence the availability and cost for money through its monetary policy.

In addition to theories of unemployment, a few categorisations of unemployment are used for more precisely modelling the effects of unemployment within the economic system. Some of the main types of unemployment include structural unemployment, frictional unemployment, cyclical unemployment, involuntary unemployment and classical unemployment. Structural unemployment focuses on foundational problems in the economy and inefficiencies inherent in labor markets, including a mismatch between the supply and demand of laborers with necessary skill sets. Structural arguments emphasize causes and solutions related to disruptive technologies and globalization. Discussions of frictional unemployment focus on voluntary decisions to work based on individuals' valuation of their own work and how that compares to current wage rates added to the time and effort required to find a job. Causes and solutions for frictional unemployment often address job entry threshold and wage rates.

According to the UN's International Labour Organization (ILO), there were 172 million people worldwide (or 5% of the reported global workforce) without work in 2018.

Because of the difficulty in measuring the unemployment rate by, for example, using surveys (as in the United States) or through registered unemployed citizens (as in some European countries), statistical figures such as the employment-to-population ratio might be more suitable for evaluating the status of the workforce and the economy if they were based on people who are registered, for example, as taxpayers.

To the layman, unemployment is a situation when people stay without jobs or a state of joblessness. But sociologist views unemployment based on the individual interest in relationship with labour force as regard in the society or environment he found himself. Ernest (2013) observes unemployment as a state where people who are willing to work at the prevailing wage rate are unable to find jobs. In other words, the people involved must be willing or interested, but people who are not actively seeking paid employment or job should not be counted as unemployed in any given societal labour force. Okeke (2010), reports that developing nations mixed up two concepts together by their government officials who are always biased. When we discussed unemployment terms, but the issue of underemployment still exist in their nations. He refers to underemployment as underutilized labourers whose productive capacity is below the reasonable potential. Mostly, when the degree in which the people’s gainful activities fail to make the maximum use of their productive capacity. While unemployment refers to less than full or zero employment of the labour force or inadequate employment in various sectors of an economy. Therefore, underemployment and unemployment go together as a concept of labour force. The International Labour Organization (ILO, 2012) refers to the unemployment as the members of the economically active population who are without work, but available and seeking work including people who have lost their jobs and those who voluntarily left work. Nigeria National Bureau of Statistics (NNBS, 2013) the labour force of a nation is a set of citizens or people who are willing and are able to make available at any given point in their effort for gainful employment; while the unemployed are the individuals with no work, but are looking for work at the time of this study. The Central Bank of Nigeria (CBN, 2013) reports that unemployment rate is seen as the percentage of people among the labour force within 15 – 65 years excluding students and those medically unfit available for work but did not work.

Therefore, unemployment is the situation of worklessness experienced by people who see themselves in labour force and are perceived by others as capable of work and they have spirit of work in them. Unemployed people can be seen as those who have never worked but they are of age and those who have lost their jobs still seeking re-entry into the labour force.

Causes of Unemployment in Nigeria

Micklinley (2014) views that Nigerian Government misunderstood modernization ideology, where they only place priority on theoretical perspective or paper qualification instead of practically ideology of entrepreneurship that create jobs in the society. And, rural areas are totally neglected or abandoned in terms of development, only urban areas are been developed. Then people move greatly to cities for employment opportunities but they never found. Ade (2012) asserts that Nigeria ethnic orientation create unemployment. Hence, Nigeria employment is based on quota, catchment and settlement systems, instead of merit system that improves the labour market-system and it creates room for better future society. Olu (2014) opines that Nigeria is not moving with modernization wave. Modern era introduce new technology or the use of new machines in industrial production. Indeed, many workers could not find jobs because machines have taken over in industries, where goods are produced at fast speed, larger quantities, unique qualities and price of production are low. Therefore, Nigeria is still an underdeveloped nation for lack of scientific skills to create jobs in industries for workers to be employed. Musa (2011) explains that Nigerian approach to development or modernization is wrong. Nigerians prefer administrative or clerical office work in the civil service than entrepreneurship or skills. Even, when a person studied a course that could make the person create jobs in the nation, such as Engineering, Law, Medicine, Pharmacy, Business Administration etc.

International Labour Organization (ILO, 2013) views five factors responsible for Nigeria unemployment such as; Firstly, high level of corruption has robbed the nation strong economic base, inspite of the abundant natural resources. Corruption that exists in every sector of governance is the foundation of unemployment through diversion of funds to personal interest or investment which erodes the economy of the nation through kick backs, misappropriation and misplacement of public funds. And, the establishment of anti-corruption bodies since post independence have been a mere propaganda which has been the governance tradition to deceive the Nigerian citizens. Moses (2012) expresses that corruption has robbed the nation of the chance of losing more than $600 billion estimated revenue from the sale of oil in the last 55years to develop a sound economy that suppose to generate jobs or employment for the citizens in the various sectors of governance or public.

e jobs or employment for the citizens in the various sectors of governance or public. Secondly, International Labour Organization (ILO, 2012) observes that the nation’s education curricula are in appropriate. ILO expresses that higher institutions in Nigeria produces unemployable graduate in labour market, because they lack basic skills required by the labour force. Mostly, Nigeria tertiary educational course contents lack entrepreneurial skills that should enable graduate to becomes employer than employee, job seeker, unemployed, joblessness etc. the Nigeria education sectors or policy makers understood employment as a job with salary and working for someone. This ideology has influenced the educational policy makers that provide school curricula for training of students. In other words, this training system has programme graduates towards lack of entrepreneurship, but seekers of former sector jobs, unfortunately the jobs are not available because attention is not given to skills development.

Thirdly, the existence of continuous decline in the manufacturing sector in Nigeria Manufacturers Association of Nigeria (MAN, 2012) expresses that, more than 913 factories had shut down or collapsed. The MAN reports cover four manufacturing zones in the nation in terms of manufacturing activities. These include the southwest, south- south, south east and northwest areas. According to the survey, the southwest enclave especially, Lagos, experienced 233 manufacturing firms shut down covering Apapa, Ikeja, Ikorodu and other industrial estates in Lagos. Other industrial areas affected in the south west include Ogun, Ekiti, Ondo, Kwara, Kogi and Osun States lost 244 companies that period. In the southeast axis involves Abia, Anambra, Imo and Enugu States, a total number of 197 companies shut down that period. In the Northwest, a total number of 195 manufacturing firms were affected covering Kano and Kaduna States. Lastly, the South-south areas which involve Akwa Ibom, Cross River, Delta, Rivers, a total of 44 manufacturing firms were closed up during the period of this survey 2012. And the remaining operating firms in labour force of Nigeria are classified as being at break-even conditions.

Fourthly, Nigeria has continued to experience rapid population growth rate, the increasing population growth has produced great number of job seekers, causing increase in number of working class population. According to National Population Commission (NPC, 2006); the nation’s population was over 140 million. And the population for the future year in 2020 through projection could be over 185 million. In other words, the facts still remains that Nigeria is the most populous nation in the African continent. As a fact, the growth in population rate has caused a high demand rate in the labour market that result to higher growth rate of job seekers that are more than the jobs in supply at the market force.

Lastly, the existence of rapid expansion of the educational system but weak economy to absorb unemployed/graduates. Nigeria government has deregulated establishment of education institution through encouraging the operation of private, missionary and public institutions. However, the establishment of these institutions are not properly funded, but government is still creating rooms for multiplicity in educational institution which causes graduates or unemployed to grow at multiple progression, but employer or jobs are growing at arithmetic progression thereby resulting to increase in unemployment in the nation. ILO (2013) states that the total number of graduates or unemployed in Nigeria in 2012 was over 5.4 million without any hope of getting employment for maintenance living based on the weak economy to absorb the unemployed citizens.

Effect of Unemployment

Unemployment has effects on both individual and the socio- economic of a nation. Firstly, the unemployed group of people are waste or losses to the national income growth. The unemployed people could have contributed to the economic growth of the nation, but they generate nothing to the productivity of labour and causing reduction to future economy. Also, unemployment is a serious problem to family stability, when husband cannot meet up his marriage responsibilities or obligations. Moreso, unemployment disharmonised man in the society, people lost their self respect and confidence in life; they always depend on their parents, nation, friends etc for their livelihood and makes man to develop the sense of immorality such as alcoholism, prostitution, armed robbery, loss of self actualization, laziness, family crisis, stealing, riots, thuggery, kidnapping, insecurity etc. Therefore, unemployment is a threat to economic, socio- cultural and security of a nation and a major factor associated with underdevelopment, based on how it discourages foreign investors, reduces the quality of life, destroys human and damages relationships between man and his nation, undermining rule of law to promote development etc.

Mostly, westernization development has negative impacts on socio-cultural values in the society, where the urbanization is spreading widely or rapidly than improvement in socio-economic activities. In otherwords, unemployment is a serious threat to a nation. It causes great personal suffering, vast skills damage and places enormous burden on urban social network. Kalu (2009) views unemployment as dehumanising people in the labour market; causing people to involve in fraudulent activities such as cheating, forgery, 419 syndrome, etc. Chika (2014) observes unemployment as a level ground for frustration, dejection and desperation activities that manifest prolific deviant behaviour known as economic fraud in form of international drug smuggling, internet innovation deal, money laundering, 419 racketeering, etc. These dubious activities mean that man must survive in the labour market. Moreover, unemployment poses a serious threat to a nation’s existence and development and if not monitored, it will lead to disastrous result to the nation; through nurturing national income failure; encourages insurgencies in oil pipeline destruction and vandalisation in Niger Delta. Again, unemployment increases the activities of Boko Haram in the Northeast region of Nigeria in destruction of lives and property. These are the factors that influence underdevelopment in a nation. Basically, the resources that would have been invested in increasing output, fund health, education, social welfare services are diverted to control these social problems existence in the country.

Steps At Combating Unemployment In Nigeria

Several efforts have been taken by both the past and present government at reducing the effects of unemployment in Nigeria. They include;

a. National Directorate of Employment (NDE): One of the steps taken by the Nigerian government to reduce the problem of unemployment in Nigeria was the establishment of the National Directorate of Employment (NDE), which was established in November 1986. The objective of NDE was to promptly and effectively fight unemployment by designing and implementing innovative programmes, which are directed towards the provision of training opportunities through the guidance and management support services to graduate farmers and small scale entrepreneurs. The objectives of NDE spanned across the following programmes:

-Youth employment and vocational skills development programme

-Special public works

-Small scale industries and graduate employment programme

-Agricultural development programme

The aim of the agricultural programme is to generate employment for graduates, non-graduates and school leavers in the Agricultural sector, with emphasis on self-employment in agricultural production and marketing. The programme is monitored by a team of Agricultural professionals in the Agricultural department of the directorate. However, factors which include inadequate funding and late release of funds from the federation account among others have impaired the effectiveness of the NDE agricultural programmes Chinedum (2006) in (Akintoye, 2008).

b. National Economic Employment and Development Strategy (NEEDS): The National Economic Employment and Development Strategy (NEEDS) was introduced in March 2004, in order to confront the various macroeconomic in-balances, social challenges and structural problems in the Nigerian economy. One of the principal goals is to build a modern Nigerian that maximizes the potential of every citizen so as to become the largest and strongest African economy, and a force to be reckoned with in the world. To achieve this goal, NEEDS as a development strategy anchored on the private sector and its objective is to engineer wealth creation, employment generation and poverty reduction. However, for NEEDS to achieve its objectives, there's need to design many integrated programmes that can generate employment for the youths to enhance growth and development (Adebayo and Ogunrinola 2006). As it is a medium-termed reform based development strategy, and action plan for the period 2003-2007, the impact of NEEDS was not realized in combating unemployment problem and this further point to the need to seek help in the informal sector in order to drastically reduce unemployment.

Ways of Reducing Unemployment Rate in Nigeria

One of the most crucial challenges facing Nigeria economy today is the formulation of effective policy measures that will drastically reduce unemployment and poverty. Given the damnable implications of this phenomenon in an economy, is apparently clear that no country would allow this episode to uninterruptedly proceed without mitigation. Therefore, in the continuous effort towards unemployment reduction in African economies especially in Nigeria, the following suggested policy measures are very useful;

• Employment Generation through Educational System Restructuring

Given the high level of unemployment in Nigeria, the development of entrepreneurial skills and initiatives should be of paramount important especially in higher education sector in order to facilitate employability of graduates who will increasingly be called upon to be not only job seekers, but above all to be job creators (Okebukola, 2001). Nigeria is at its lowest ebb in human capital development and utilization because of its inadequate educational system which tends to produce more of those who lack job skills for employment than those the economy require to remains vibrant. In view of this, there is the need to restructure the educational system irrespective of manpower production. Again, vocational skills should be given higher priority as it is capable of generating self-employment. The technological institutions in the country on the other hand should be probably formed and equipped to ensure efficiency. Prior to entrance into higher institutions, college students should be made to understand the implications of larger number of people enquiring academic certificate without practical skills in the present Nigerian economy. This could motivate the young people to opt for disciples that could earn them job independence afterwards.

• Provision to Enabling Environment

The poor state of infrastructure in Nigeria has continued to remain a monumental problem to the Nigerian economic growth and development in all facets and the self-engagement of Nigerians is seriously inhibited due to poor or lack of infrastructures. The economic environment has continued to remain hostile to cottage, small and medium scale industries. Therefore, there is the need for the government to efficiently meet the challenges of infrastructural development in the entire country as this will help to launch the private sector into full potentials. This will stimulate private investment and induce remarkable economic growth much more than government direct involvement in investment. This is because the empirical evidence for most African countries indicates that private investment has a significantly stronger effect on growth than does government investment probably because it is more efficient and perhaps less closely associated with corruption (Tairu, 2003).

• Re-prioritization of Agricultural Sector

Nigeria is primarily an agrarian economy. The unemployment challenges demand that the agricultural sector should be prioritized again. This can be done necessarily through the erstwhile cheap money policy programme or agricultural enlightenment campaign in both rural and urban area of the country.

• Discouragement of Exports of Jobs

The taste of most Nigerians encourages the export of jobs to other countries at the expense of the domestic economy. The taste orientation of the Nigerian consumers largely inhibits the growth of the domestic firms, which would have created employment opportunities. Every Nigerian consumer must join the war against unemployment by halting the inordinate desire for foreign products for which its substitutes are available in Nigeria. The consumers must borrow leaf from the patriotism of the Chinese consumers by developing taste and patronizing the locally made goods. By so doing, the market would be expanded and employment opportunities would be created.

• Appropriating Economic Growth Prospects

One of the most important means of reducing unemployment phenomena in Nigeria today is the acceleration of the growth capacity of the economy. Over the years, the performance of the Nigerian economy has been far below expectation; thereby reducing the chances of the utilization of both human and material resources. Therefore, the need to stimulate economic growth in Nigeria with the utmost commitment cannot be over emphasized. The way forward is the diversification of the economy. This can be achieved through the dismantling of the current pseudo federalism that encourages indolence and absolute dependence on oil. Nigerian government should as a matter of urgency imbibe the spirit of true federalism by institutionalizing resource ownership for the country’s resource management and reducing the inordinate urge for central power control that induces much political violence. In so doing, regional development, healthy competition and economic diversification will be achieved. This will greatly improve the growth process of the economy and generate employment opportunities.

The Evolution Of The Nigerian Payment System

The Nigerian payments system has evolved over the past few decades. The modern payments system started being completely paper-based with the use of banks notes, payment orders, and cheque. In 1996, the payments system was modified to include card-based e-payment products. This was followed by the introduction of pay card in 1997. By 1999, card based payment products assumed an open platform with authorization from the CBN for the floating of two card service companies by a consortium of over 20 banks. In 2003, the CBN, in collaboration with the Bankers Committee, launched the first major initiative to modernize the payment system, granting approval to a number of banks to introduce international money transfer products, telephone banking, and online banking via the internet on a limited scale. Today, virtually all banks have introduced electronic funds transfers (EFT), debit and credit cards, internet banking, mobile banking and deployed Automated Teller Machines (ATM). The Nigerian payments system has further evolved with the introduction of the Payments System Vision 2020, launched in 2007 to facilitate a wider range of electronic payment methods such as POS terminals, facilitated by a wider range of service providers. By 2007, the payment system had transitioned from being cash-heavy to a bulk payer status, which is a combination of cash, and some electronic instruments, mainly Automated Teller Machine (ATM). Post 2007, Nigeria continues to embark on measures to increase the use of electronic channels in its journey to a cash lite society with efficient payment systems. In 2011, the CBN launched a cash policy to modernize Nigeria’s payment system (in line with the country’s vision 2020), reduce the cost of banking, foster economic growth and improve the effectiveness of monetary policy. The cash policy is to reduce the rate at which cash is physically moved in the country. The cashless economy, as explained by NIBSS (2015) is aimed at reducing and not eliminating the stock of paper currency circulating within the economy. It does not refer to an outright absence of cash transactions in the economic setting but one in which the amount of cash-based transactions are kept to the barest minimum. Several electronic payment systems such as payment cards (smart card) and paper-based instrument that were introduced by the CBN gave rise to significant growth in the use of electronic payment systems. The CBN strategic plan on e-payment system is to ensure that a larger proportion of currency in circulation is captured within the banking system, thereby enhancing the efficacy of monetary policy operations and economic stabilisation measures. E-payment initiatives such as the establishment of switching companies that facilitate inter-connectivity, introduction of payment instruments such as Automated Teller Machine (ATM), web transaction, e-money products such as credit and debit cards and Point of Sale (POS) have drastically helped reduce the volume of cash transactions and the flow of cash in the Nigeria economy. Electronic payment systems that have been introduced in Nigeria are Automated Teller Machine (ATM), web transaction, electronic money products (such as credit and debit cards), and POS. These e-payment systems provide a better audit trail than transactions which involve physical cash and thus reduce the amount of currency in circulation (Adeoti & Oshotimehin, 2012). POS is one of the e-payment systems introduced in Nigeria to further the course of cashless policy. POS is an electronic payment device which enables individuals to make purchases with electronic cards. POS accepts ATM cards for payment of goods and services. This card stores account information on microchips. The microchip contains a purse in which monetary value is held electronically. The card can be used to make purchase of goods and services online, in supermarkets, shopping malls, and other market places. POS allows cardholders to have a real time online access to funds and information in their bank account through debit or cash cards. POS deployment is projected to hit 350,000 in 2014 from 120,191 in 2013, reflecting growing acceptance of POS and electronic card payments. This is because between 2012 and 2014, it was found that the volume of transactions conducted via POS increased by 183% compound annual growth rate (CAGR) suggesting significant adoption and usage of POS (NIBSS, 2015).

The Mechanics of the Cashless Policy in Nigeria

The cashless initiative is an alternative to cash transactions through electronic means using information and communications technology (ICT). Ndifon and Okpa [Ndifon E 2014] maintain that the future of all business, particularly those in the service industry lies in information technology. This technology as far as cashless policy is concerned is not only computer. Information technology for banks takes different forms; computerization of customers’ accounts and account information storage and retrieval; deposit and withdrawal through Automated Teller Machines (ATMs); and networking to facilitate access to accounts from any branch of the bank, bio-metrics, use of mobile phones to consummate transactions, internet, and websites. It also involves the use of credit cards, debit cards, mobile pay and many other forms of payment, but always only in digital ways, as paper currency does not come into play. Babalola [Babalola 2008] identified seven different electronic payment channels in Nigeria, Automated Teller Machines (ATM), points of sales terminals, mobile voice, web, inter-bank branch and kiosks. Ogbuji et al. [Ogbuji 2012] noted that ATM allows a bank customer to conduct his/her banking transactions from almost every other ATM machine in the world. In this type of economy, the amount of cash in one’s wallet is not relevant. One can pay for purchases by any one of the forms of transactions in cashless economy which includes the use of credit cards or bank transfer. Cashless economy is enhanced by e-finance, e-money, e-brokering and e-exchanges Moses-Ashike, [Moses 211]. Central Bank of Nigeria introduced Point of sale and gave the guidelines in 2011 with maximum service commission of 1.25% or a maximum of NGN2000 and limiting the role of connecting and maintaining POS devices only to licensed Payment Terminal Service Providers (PTSPs). These POS terminals serve like the Automatic Teller Machines (ATM) across commercial points in the country. At the completion of a transaction and the value ascertained, the amount is entered into a POS terminal into which the electronic card has been slotted. The cash equivalent of the amount will be automatically transferred from the payer’s account into the account of the payee’s account. In Nigeria today, private enterprise, religious bodies, educational institutions and other service providers such as hotels, transport firms etc. have embraced the POS option in their transactions. Users are issued with a card (the electronic purse). The electronic purse is topped up using revaluation terminals. There are different types of terminals: coin & note, credit card and payroll deduction terminals. The cards are simply inserted into the revaluation terminal and certain programmed instructions are followed, and money is added onto the electronic purse. This can then be used to pay for goods/services by inserting them into the POS terminals. When the card is inserted into the POS, and the transaction amount entered, the reader reads the amount and is quickly deducted from the e-purse (the card) (Akhalumeh and Ohiokha, 2011). It can be used to pay for school fees, shopping bills, utility bills and others bills. The aspect of cashless policy streamlining the permitted limits of cash transactions for individuals and institutions beyond which charges apply cover all accounts types especially savings and current with exception of government revenue generation; primary mortgage institutions, microfinance banks and embassies’ accounts. The policy clearly states that the cash withdrawal and deposit limit for individuals is N500, 000 and N3,000,000 for corporations, although the policy does not prohibit withdrawals above the stipulated amounts, but such transactions will be subjected to cash handling charges. The interesting thing about the way banks are implementing this policy is that at the end of each transaction, they send alert to the customer indicating the amount withdrawn and the balance. Banks have equally made available different types of cards to enhance the electronic transactions which consist of Verve, Master, Platinum cards; some customized means of making payments include: pay pal and payoneer and so many others. It is good to mention that these e- transactions are not without charge. This policy facilitates fund transfer, thereby reducing time wasted in bank(s). The transactional ease and other advantages of cashless economy may explain its growing popularity. For instance, Wizzit, a fast growing mobile banking company in South Africa has over three hundred thousand customers across South Africa. Likewise, M-PESA was introduced in Kenya as a small value electronic system that is accessible from ordinary mobile phones. It has experienced exceptional growth since its introduction by mobile phone operator (Safaricom) in Kenya in March, 2007 and has already been adopted by nine million customers, which is about 40% of Kenya’s adult population. The success of M-PESA has been attributed to its flexibility enabling users to carryout financial transactions across long distances with their cell phones, thereby reducing their travelling costs, eliminating the risks of carrying cash and also avoiding most banking charges (Akintaro, 2012). In Sweden, it is almost impossible to find a shop that does not accept electronic payment cards, and most locals almost never carry any cash on them.

Forms of Electronic Banking

There are various forms of electronic banking which include:

Mobile banking: This is a form of E-Banking that involves using mobile phones to carry out banking transactions. This is a system that offers information to customers and other bank services. Some of the services which are provided through mobile banking include account balance inquiry, payment of bills, short message service (SMS). It enables transactions to be done anywhere in the world and at the customer's convenience. This banking is also called ‘motion banking'. It allows the customer to form banking transactions at any time as long as a mobile phone is present Ayodele, [2015].

Internet/ Online Banking: This is a form of E-Banking whereby the internet is used for dissemination of information and also allowing customers to perform banking transactions. Tools such as computers, laptops that have access to the internet are used for this process Ngango, Mbabazize, Shukla, [2015]. The bank’s website is used to advertise services. When conducting E-Banking, the instruction of customers is taken and then attended to via the same platform, The Internet. Through this product, customers are now able to enjoy 24/7 services from banks. Another advantage of the internet banking is it helps reduce the cost of operations for banks, unlike traditional banks. Just as internet banking agent banking is mainly driven by technology and transactions can be made via mobile phones, point of sales(POS) e.tc Achugamonu, Taiwo, Ikpefan, Olurinola & Emena, [2016].

Automated teller machine (ATM): An ATM is an electronic device which can be used to carry out bank transactions. Some of the services offered by an ATM include withdrawal of funds, account balance inquiry, transfer of funds, and top-up on airtime for mobile phones etc. An ATM is operated with an electronic card. Each card has a Personal Information Number (PIN) which gives access to the account of the owner of the card. The first ATM that was offered to the public was in 1969 at the chemical bank in Rockville Center, New York. ATM'S were introduced into Nigeria in the year 1989. It was installed by national cash registers (NCR) for the society General Bank of Nigeria.

Point of sale (POS): This is a form of e-payment that handles balance inquiry, payment for goods and service, electronic fund transfer at a specific point of sale. The device allows customers to make payment for goods and services purchased without the physical use of cash. At POS terminals, when a customer slots in his card into the POS, he inputs his details and in the case of payment for goods or services, his account is debited at that point resulting in a transfer of funds to the service provider's account.

Electronic cards: these are cards that contain integrated circuits which can process data and are used for conducting financial obligations. Electronic cards could be debit or credit cards. The difference between debit and credit cards is; debit cards are used for payment of purchases made and the money comes from the customer’s account directly. On the other hand, payment for goods or service using the credit card is based on borrowing. The most preferred cards used by Nigerians are the master and visa cards.

POS

According to Rose et al (2008:113), point of sale terminals are computer facilities in stores that permit a customer to instantly pay for goods and services electronically by deducting the cost of each purchase directly from his/her account. The customer presents an encoded debit card to the store clerks who insert it into a computer terminal connected to the financial firm’s computer system. The customer’s account is charged for the purchase and funds are automatically transferred to the store’s deposit account. Adeoti et al (2012:10) described a POS machine as a terminal, a box that allows a merchant to accept payments by means of cards from his customers. It works almost like an ATM machine except that in this case, the machine is designed to accept payments only on behalf of the merchant which is mostly the registered company which has an account with bank. Rose and Hudgins (2008:113), state that current Point-of-Sale network are divided between online and offline POS systems. The offline accumulates all of the customer’s transaction until day’s end and then the total of all transactions is subtracted from the customer’s account. In contrast, online system deducts each purchase from the customer’s account as that purchase is made. Customers and financial firms would generally prefer offline POS system, but online system appears to reduce the frequency of customer overdrafts and, thus may be less costly in the long run.

A point of sale (POS) terminal is a computerized device in replacement for a cash register, much more complex than the cash registers of even just a few years ago. The POS system can include;

a) The ability to record and track customer orders.

b) Process debit and credit cards.

c) Connect to other systems in a network and

d) Manage inventory.

Generally, a POS terminal has as its core, a personal computer, which is provided with application-specific programs and 1/0 devices for the particular environment in which it will serve. A POS system for a restaurant, for example, is likely to have all menu items stored in a data base that can be queried for information in a number of ways. POS terminals are used in most industries that have point of sale such as a service desk, including restaurants, lodging, entertainment, and museums. Okechi and Kepeghom (2013:12) describes POS as an electronic device that is used for verifying and processing credit transactions typically connected via highly reliable performance. A retail point of sales system typically includes a computer, monitor, cash drawer, and receipt printer, customer display and barcode scanner, and the majority of retail POS system also includes a debit/credit card reader. It can also include a weight scale, integrated credit processing system, a signature capture device and a customer pin pad device. More and more POS monitors use torchscreen technology for ease of use and a computer is built into the monitor chassis for what is referred to as an all-in-one unit. According to Central Bank of Nigeria (2013:3) the approved minimum standard for POS card acceptance services include that all industry stakeholders who process and /or store cardholder information shall ensure that their terminals, applications and processing systems comply with the minimum requirements of the following standards and best practices (for PCI, the minimum requirement will be level 2.1). In addition, all terminals, applications and processing systems should also comply with the standard specified by the various card schemes. Each vendor must provide valid certificates showing compliance with these standards and must regularly receive status of all its terminals to ensure they are still compliant as standards change. There will be a continuous review and recertification on compliance with these and other global industry standard from time to time.

Benefits/Importance of POS

POS payment platform confers several benefits to users. Some of these benefits are summarized below:

a) Better and faster way of making payments.

b) Convenient to use for all amounts as cash payment could be bulky.

c) Deposits money electronically into your account without having to go to the bank.

d) Reduces risks of theft and cash handling.

e) Transactions can be monitored online real time.

f) MIS report can be generated anytime on the PoS terminal for you.

g) Increases sales as customers buy more with cards than cash at hand.

h) The economy now demands card payment as a preferred option to cash with large handling charges imposed on individuals and companies who withdraw and pay in cash.

Challenges to the efficient use of point of sale (POS) terminals in Nigeria

The role and importance of efficient payment systems has been closely monitored and promoted by monetary authorities in all countries. However, the Nigerian payment system that is cash-driven cannot and has not guaranteed the much needed efficient and effective transactions required for a sustainable economic development. Among the problems often associated with cash transactions are armed robberies, use of counterfeit bank notes, frauds, inconveniences of carrying large quantities of currency notes, long period of waiting in bank halls, frequent trips to banks, frequent printing of bank notes (Nnanna and Ajayi, 2005). Most economies of sub Saharan Africa countries is cash based. This is often associated with high cost of cash management in these countries. For example in Nigeria, over 90% of funds circulate outside the banking sector (Ojo, 2004; Ovia, 2005). According to Central Bank of Nigeria (CBN, 2011), the cost of cash management in 2009 was N114.6 billion and grew to N135 billion and N166 billion in 2010 and 2011 respectively. The apex institution projected that the cost of managing cash will hit N192 billion by 2012. These cost arises from frequent printing of currency notes, currency sorting, cash movement, keeping large amount of cash, security cost of checking high incidences of robbery and burglaries to mention a few. This has made Nigeria cash-dependent, cash loving and cash carrying society, as an average Nigerian businessman prefer cash transactions. Reliance on cash based economy has however been found to be risky and cumbersome because money outside the banks cannot be subjected to regulatory and operational procedures, and the ability of monetary policy to achieve set objectives in the presence of sizeable currency out of Bank (COB) is therefore limited. This cash carrying character of the economy is also responsible for large pool of money in the hands of the unbanked citizens. In order to reduce the volume of cash in circulation and reduce the risk of going about with cash, the CBN introduced electronic payment system such as payment cards (smart card) and paper- based instrument to the country. This has encouraged e-payment initiatives such as the establishment of switching companies that facilitate interconnectivity, introduction of payment instruments such as point of sale (POS) terminal and automated teller machine (ATM) which gave rise to significant growth in the use of electronic payment systems (Salimon, 2006). Speculation however exists on the possible challenges to the use of the payment system. This concern necessitate this study which is aimed at providing information on possible challenges to the use of POS terminals and the characteristics of its consumers that could influence such challenges. Generally, electronic payment system (e-Payment) refers to an electronic means of making payments for goods and services procured online or in supermarkets and shopping malls. It enables websites and shopping malls to securely process transactions in real time. It operates on a smartcard that stores information on microchips. The microchip contains a purse in which monetary value is held electronically. The electronic payment system takes several forms. This payment system provides a better audit trail than transactions that involve physical cash and thus reduce the amount of currency in circulation. The CBN strategic plan on payment system is to ensure that a larger proportion of currency in circulation is captured within the banking system, thereby enhancing the efficacy of monetary policy operations and economic stabilization measures. While there is volume of studies on e-payment system such as ATM, there has been dearth of literature on POS especially factors influencing its adoption among the consumers. In spite of the practice of modern payments system in the world with their attendant advantages for both consumers and financial institutions, it has not become mainstream activities in Nigeria (Kolodinsky, 2004). Nigerian consumers and banks apparently still regard “in-person banking” as a more important method for money transactions. This cash-based payments system is responsible for the N545.8 billion currently in circulation (CBN, 2004). This represents about 90% of the total volume of cash in circulation compared to 4 and 9% in the UK and the USA respectively (Ovia, 2005). Despite the overwhelming superiority of electronic payment options, business–to– business transactions are still pre-dominantly consummated in Nigeria with the use of cash and to a limited extent bank’s cheque or certified cheque. The unintended social and economic costs (risks and inconveniences) associated with cash transactions are alarming. The most obvious has to do with insecurity (considering daily loss of lives from the activities of fraudsters, and armed robbers) as enhanced and encouraged by cash payments system. There is also the inconvenience of carrying larger volume of currency notes, the use of counterfeit banknotes, time loss as a result of long period of waiting and making frequent trips to banks. The monetary authorities also bear the high cost of printing bank notes due to the short life cycle of notes, and the cost of moving large amount of cash from banks to banks and across the country. Overdependence on cash for transaction also implies that much cash is held outside the banking system, which naturally reduces the capacity of banks to lend to the productive sectors of the economy. It is for some of these reasons that a forward-looking economy should seriously think of embracing the modern payments system, such as credit card, electronic money, electronic fund transfer, Automated Teller Machine (ATM) and debit card. Debit card is particularly important in a growing economy as Nigeria. For instance, debit card will promote better services to customers, because it is a very fast and speedy means of financial transaction. It is more efficient than cash, and, there will be drastic reduction in the printing of bank notes. It will remove the high cost of handling and printing notes. It will also increase profitability due to considerable reduction in overheads and most importantly, it will enhance security of life and property from armed robbery incidences that have become a common phenomenon in the country. Debit card will also make it possible for more money to be available to lend to the productive sectors of the economy. This will bring about positive impacts on economic growth and global competitiveness. However, to ascertain the enumerated benefits of this payment instrument, there is a need to analyze possible challenges to the efficient use of POS terminals determine. In fact the global trend in the use of electronic payment system, particularly the growing popularity of ecommerce calls for studies such as this. However, the empirical studies that are related to the use of debit card, as a payment instrument are foreign researches conducted in advanced countries of the world.

2.2 THEORETICAL FRAMEWORK

Acceptance Technology Model (TAM)

TAM was proposed by Fred Davis in 1985 in his doctoral thesis at the MIT Sloan School of Management Ajayi, [18]. The model suggests that when users are presented with a new technology, a number of factors influence their decision about how and when they will use it. The factors are; perceived usefulness (PU) and perceived ease-of-use (PEOU). Applying this theory in this study, TAM is an information systems’ theory that models how users come to accept and use new technology (ATM, POS,Mobile phone banking and internet) in carrying out banking transactions that will encourage Nigerian employment rate.

Keneysian’s Theory

Keynesian's analysis stipulates that monetary policy plays a crucial role in affecting economic activity. It contends that a change in supply of money can permanently change such variables as the rate of interest, the aggregate demand and the level of employment, output and income. This theory also believes in the existence of unemployment equilibrium. This implies that an increase in the money supply can bring about a permanent increase in the level of output Jhingan [19]. The Keynesian theory thus implies that cashless policy can permanently affect Nigerian unemployment rate.

Unified Theory of Acceptance and Use of Technology

Venkatesh, Morris, Davis and Davis (2003) introduced the Unified Theory of Acceptance and Use of Technology. UTAUT provides a comprehensive amalgamated theoretical underpinning explaining the application of ICT based strategies in an organization. The theory explains that the successful application of technology based strategies in an organization is based on four major aspects: “performance expectancy (P.E), effort expectancy (E.E.), social influence (S.I.), and facilitating conditions (F.C)” (Venkatesh et al., 2003). According to the theory, P.E pertains to the level that applying the technological strategy benefits customers in performing particular transactions. E.E is the extent of simplicity that the strategy grants customers in accessing products/services. S.I is the customers’ perception of the benefits of the technology to others, while F.C are the perceptions of the customers on the resources and assistance provided for them in using it (Brown & Venkatesh, 2005). The theory further alleges that the influence of these four aspects on the successful application of the ICT based strategies is further moderated by four variables including: age, gender, experience and voluntariness to use the technology. Importance of UTAUT in this research is that it helped in assessing ability to meet the four major aspects alleged in the theory as critical for the successful application of ICT based strategies. Furthermore, insights from the theory helped to interrogate how these aspects in the case of electronic banking strategies influence organization’s competitive advantage.

Resource – Based Theory

Barney (1991) introduced the resource based theory (RBT) but its original ideas originated from Penrose (1989). According to the theory, a firm’s competitive advantage is primarily based on the uniqueness of its resources, processes and capabilities, which enables the firm to make good use of any market opportunity and stay ahead of competitors. However, according to Grant (2001), competitive advantage of the firm cannot be achieved through a single resource or process, but it is attained through a right mix of resources, processes, strategies and capabilities in the firm. Barney (1991) underscores that for a firm to innovatively transform its competitive advantage from short term to a sustainable long-term competitive advantage, it must ensure that it possesses diverse resources that are mobile. According to Johnson et al. (2008), in RBT, competitive advantage is a product of interrelation between the organization’s internal resources and strategic behavior, giving the firm unique capabilities which are not easily duplicable by other firms. Importance and application of RBT in this research was to provide insights which helped in assessing application of EBS by banks to achieve competitiveness. That is, whether the diverse electronic banking strategies applied by the banks enables the banks to acquire competitive advantage or not. It also helped to interrogate how each of them contributes to the banks’ competitive advantage and how the mix of different electronic banking strategies affects the banks’ competitiveness.

Classical Theory Of Unemployment

The view of most economist always go with their thinking at that particular time. The two major school of economic thought were the „classical and keynesian‟. The two have different ideas on the

The classical were the school of thought that emphasized the role of money in explaining short term changes in national income.

Traditionally, this theory has been that unemployment has been looked upon in terms of aggregate. Their view was that involuntary unemployment was a short term phenomena resulting from a disc discrepancy between the price level and the wage level. Unemployment was the result of too high real wages.

At times the wage level in the classical view would be reduced and there would be no unemployment except for frictional search unemployment caused by time delay between quitting one job and starting another. These school posses that the problem of urban unemployment is traceable to the fault of workers and the various trade union power. They believed strongly in the theory of demand and supply. Therefore it insists that urban unemployment is caused by low supply of labour of more than the capacity of the economy

Consequently, the school argued that the demand for too high wages of worker without a corresponding increase in productivity renders product costly thereby discouraging competitiveness among local industries and foreign industries. The implication of this trends is the reduction of sales, which further leads to mass retrenchment of workers resulting to unemployment.

Keynesian Theory Of Unemployment

The ideas of the British economist, John maynard Keynes in 1930‟s revolutionized thinking in several areas of macro economics including unemployment, money supply, and inflation which is seen in his publication of 1936 as the general theory of unemployment interest and money‟.

Cyclical or Keynesian unemployment also known as demand deficient unemployment occurs when there is no aggregate demand in the economy. It gets its name because it varies with the business cycle, though can also be persistent as during the great depression of the 1930‟s. Cyclical unemployment rises during economic down turns and falls when the economy improves.

Keynes argues that this type of unemployment exist due to inadequate effective demand. Demand for most goods and services falls, less production is needed, wages do not fall to meet the equilibrium level and mass unemployment results.

The Keynesian framework, as examined by Thirlwal(1979), Grill and Zanalda(1995) and Hussian and Nadol(1997),postulate that increase in employment, capital stock and technological change are largely endogenous. Thus the growth of employment is demand determined and that the fundamental determinants of long term growth of output also influence the growth of employment.

In the Keynesain theory, employment depends upon effective demand which results in increased output, output creates income and income provides employment. He regards employment as a function of income. Effective demand is determined by aggregate supply and demand functions. The aggregate supply function depends on physical or technical conditions which do not change in the short run, thus it remains stable. Keynes concentrated on aggregate demand function to fight depression and unemployment. Thus employment depends on aggregate demands which in turn is determined by consumption demand and investment demand.

According to Keynes, employment can be increased by increasing consumption and or investment. Consumption depends on income C(y) and when income rises, savings rises. Consumption can be increased by raising the propensity to consume in order to increase income and employment but the psychology of the people (taste, habit etc) which are also constant in the short run. Therefore, the propensity to consume is stable. Employment thus depends on investment.

2.3 CHAPTER SUMMARY

In this review the researcher has sampled the opinions and views of several authors and scholars on unemployment, causes and and the use of POS. The works of scholars who conducted empirical studies have been reviewed also. The chapter has made clear the relevant literature.