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Abstract

This paper examines the impact of mobile money on prices and output in Nigeria between 2008M1 to 2016M12. Using mobile money payment (MM) as a proxy for mobile money transaction, the structural vector auto-regressive (SVAR) model was adopted to test for the response of money supply (M2), consumer price index (CPI) and real gross domestic product (RGDP) to shocks from mobile money. The result shows that output responds positively to positive shocks from mobile money. This confirms the postulations that increase in velocity of money would improve the volume of money in circulation and given the slack in the economy wherein the economy operates below full-employment or potential capacity, increase in money supply will account for increase in national productivity with no effect on price. Also, the response of consumer price index to shocks in mobile money was stable which implies that shocks from mobile money transactions that results in increase in money supply and velocity does not precipitate price increase rather it would increase the macroeconomic stability of the countries in which it is widespread. Based on the study’s findings, it is recommended that the government and policymaker should encourage the use of mobile money to achieve price and output stability. They should also develop means of controlling mobile money transactions to channel macroeconomic variables in the desired direction towards achieving the desired policy goals.