ASSESSING THE ECONOMIC AND OPERATIONAL IMPLICATIONS OF REDESIGNING OLD CURRENCY NOTES IN THE NIGERIA BANKING SECTOR

ASSESSING THE ECONOMIC AND OPERATIONAL IMPLICATIONS OF REDESIGNING OLD CURRENCY NOTES IN THE NIGERIA BANKING SECTOR BY BETHEL REJOICE OLUOMACHI 2019/122566/REGULAR THE DEPARTMENT OF BANKING AND FINANCE, FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES, ABIA STATE UNIVERSITY, UTURU. APRIL, 2024 ASSESSING THE ECONOMIC AND OPERATIONAL IMPLICATIONS OF REDESIGNING OLD CURRENCY NOTES IN THE NIGERIA BANKING SECTOR BY BETHEL REJOICE OLUOMACHI 2019/122566/REGULAR A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF BANKING AND FINANCE, FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES, ABIA STATE UNIVERSITY UTURU PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF BACHELOR OF SCIENCE (B.Sc.) IN BANKING AND FINANCE APRIL, 2024 DECLARATION I, BETHEL REJOICE OLUOMACHI with matriculation number 2019/122566/regular do hereby declare that this project has not been previously presented either wholly or in part for the award of any other Degree, Diploma or Certificate in any University or Institution of Higher learning in Nigeria or elsewhere. Bethel Rejoice Oluomachi ____________________ (Researcher's Name) (Signature of Researcher) ______________________ Date CERTIFICATION The undersigned do hereby certify as follows; that this research study was done by BETHEL REJOICE OLUOMACHI with the matriculation number: 2019/122566/regular, that to the best of our knowledge, this is the original work of the candidate and the project is accepted in partial fulfillment of the requirements for the award of Bachelor of Science (B.Sc.) Degree in Banking and Finance in Abia State University, Uturu. ______________________ ____________________ Mrs. Effe-Nnamdi Ann Date (Supervisor). _______________________ ____________________ Dr. Ejem, C. A Date (Head of Department) ________________________ ____________________ Prof. N. O. Dibia Date (Dean, Faculty of Economics and Management Sciences). _________________________ ____________________ External Examiner. Date DEDICATION This work is dedicated to God Almighty who helped and saw me throughout this work. ACKNOWLEDGEMENTS I am very grateful to God who has helped me and brought me this far. I also want to appreciate my supervisor, Mrs Effe-Nnamdi Ann for her support, insight, feedback and belief in my abilities. I also want to say a big thank you to Prof O.M Ogbulu (Vice Chancellor, Abia State University, uturu), the Head of Department Dr. C. A Ejem and my lecturers: Prof. G.C Okpara, Prof S.U. Okanta, Dr. J.C Onoh for their great help and how they have impacted so much knowledge into me in becoming a great financial banker. I am also grateful to my dad, Pastor Bethel Ikechukwu Ogbonnaya for his financial and spiritual provision, I couldn't ask for more. Also, to my mom, Mrs. Ifeoma Bethel for her motherly care and affection. I also want to extend my gratitude to my siblings, Favour Bethel and Samuel Bethel who were both sources of encouragement and moral support. A special great thanks to the Lord's chosen Campus Fellowship for their great impact in my life and helping me grow spiritually. I am also grateful to everyone whom God gave to me throughout my stay here in school; Miracle, Divine Favor, Premium, Lovelyn, Hadassah, Ozioma Pascaline and Evangeline, I love you all. BETHEL REJOICE OLUOMACHI 2019/122566/Regular TABLE OF CONTENTS Cover Page i Title Page ii Declaration iii Certification iv Dedication v Acknowledgements vi Table Of Contents vii Abstract ix CHAPTER ONE: INTRODUCTION 1.1 Background to The Study 1 1.2 Statement of the Problem 6 1.3 Research Objectives 7 1.4 Research Questions 8 1.5 Research Hypotheses 8 1.6 Scope of the Study 9 1.7 Significance of The Study 9 1.8 Organization of The Study 10 CHAPTER TWO: REVIEW OF RELATED LITERATURE 2.1 Conceptual Literature 12 2.1.1 Currency Redesign 12 2.1.2 Economic Implications 18 2.1.3 Factors That Contributed to The Failure of The Currency Redesign Regime 24 2.1.4 Role of The Banking Sector 27 2.2 theoretical framework 28 CHAPTER THREE: METHODOLOGY 3.1 Research Design 38 3.2 Source of Data 38 3.3 Population 39 3.4 Sample size and Sampling Technique 39 3.5 Instrument of Data Collection 40 3.6 Data collection Procedure 41 3.7 Reliability and Validity 41 3.8 Data Analysis technique 43 3.9 Ethical Consideration 43 CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS 4.1 Data Presentation 45 4.2 Data Analysis 46 4.3 Test for Hypotheses 49 CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 Summary 53 5.2 Conclusion 54 5.3 Recommendations 54 References ABSTRACT This study assessed the economic and operational implications of currency redesign in the Nigerian banking system. The objectives were to find out factors responsible for redesigning of old currency notes in the Nigerian banking system, determine the economic implications of redesigning of old currency notes in the Nigerian banking system; and assess the operational implications of redesigning of old currency notes in the Nigerian banking system. Survey design was adopted. The sample size was 149 while 114 was used for analysis. Data were collected through questionnaire from selected bank staffs in Umuahia. Analyses were carried out using descriptive statistics and regression. Findings are as follows: There are significant factors responsible for redesigning of old currency notes in the Nigerian banking system; there is significant economic implication of redesigning of old currency notes in the Nigerian banking system; and there is significant operational implication of redesigning of old currency notes in the Nigerian banking system. In conclusion, this study showed that there are economic and operational implications for old note redesign in Nigeria. It therefore recommended that the Central Bank of Nigeria must constantly review factor responsible for currency redesign and to ensure that it is a policy that benefits everyone in the economy. Problems arising from the policy that have negative economic implications must be adequately addressed before embarking on the mission of currency redesign. 2 CHAPTER ONE INTRODUCTION 1.1 Background to the Study The basic form of money is numbers; currently the basic form of currency is paper notes, coins or plastic cards (i.e. credit or debit cards). Though this distinction between money and currency is important in some context, for the purpose of this study, the terms ‘money’ and ‘currency’ are used interchangeably (Gary, 1996). Money allows people to trade goods and services indirectly. It helps communicate the price of goods, and it provides individuals with a way to store their wealth. Money, whether it’s represented by a seashell, a metal coin, a piece of paper, or a string of code, or electronically mined by computer, doesn’t always have value. Rather, its total global value depends on it as a medium of exchange which people place on it. There are over 180 currencies in the world circulating in 197 (Eurochange, 2022). There is the United States Dollar (USD), European Euro (EUR), Japanese Yen JPY, British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), South Africa Rand (ZAR), Ghanaian Cedis, Nigerian Naira, etc. Altogether, there are 162 official currencies around the world of these 162, however, 47 currencies are tied to another with a fixed exchange rate. This means that, for example, the Danish Krone is a currency in its own, but is tied to EUR with a constant rate. Other countries like Bahamian dollar even correspond to the USD directly in 1:1 rate. The oldest currency still in use is the British Pound sterling. It spread over Great Britain and its various colonies like Nigeria, Ghana and others, for more than 1,200 years. Countries around the world redesign and reissue their legal tender for several reasons. The prevention of counterfeit currency is a key motivation. A country's ability to limit counterfeiting to a minimum and remain ahead of counterfeiting threats is made possible by redesigning its national currency. According to best practice the issuance of new currency should be undertaken every five to eight years. The purpose of the currency redesign is to mop up the huge amount of cash that is outside the banking system, which currently estimated at 2.73 trillion or about 85% of the total cash in circulation. Economic factors driving the redesign of the Naira include lowering inflation, thwarting counterfeiting, reducing insecurity, and increasing the amount of money in circulation, as it is believed that 85% of all the country's cash is hidden away in houses outside the banking system. Amassoma, Keji and Emma-Ebere (2018), explained that monetary policy is a vital tool which could be used to achieve currency management, price stability, and strengthen the growth of investment. Studies show that currency redesign is a good approach to manage the money in circulation (International Monetary Fund, 2022; Whelan, 2010; Kregel, 2010). It is hoped to minimize the influence of money on the country's electoral process thereby discouraging vote-buying and inducement of electoral officers. However, many experts have argued that the timing of this exercise in Nigeria is always wrong, and this paper cannot agree less. Literatures available revealed that the CBN always plans to execute the currency redesign to effectively manage the flow of the currencies (CBN, 2015). And the short period notice is put in place to penalize those hoarding or laundering the Nigerian currency. On October 26, 2022, the Central Bank of Nigeria (CBN) unveiled its new program on the redesigning of Nigeria's three highest denomination banknotes: N200, N500 and N1000. Replacements for the old notes began circulating on December 15, 2022, in different colors and security features (CBN, 2022 a: 1). The Apex Bank's decision to demonetize the old notes by February 10, 2023 and circulate limited amount of the new notes (Adegboyega, 2023) resulted in an unprecedented cash crunch. With a visible infrastructural deficit for a cashless economy to effectively take-off in Nigeria, transactions via e-banking channels became very difficult especially for the poor, unbanked and unlettered segments of the population. The new program, therefore, attracted reactions from Nigerians. A section of the political class in the country cried foul, alleging that the government was using the CBN as an attack-dog to render politicians bankrupt ahead of the 2023 general elections, held in February and March. A number of economic experts thought that the programmed would have a devastating effect on Nigeria's economy, especially because it was hurriedly conceived, planned and implemented. Typical of Nigerian public discourses, many commentators, who felt that the program was unnecessary, criticized it for reasons as trivial as the view that the new notes were merely “recolored” versions of the old notes, but not “redesigned” (Nwanma, 2023). According to the Central Bank of Nigeria (CBN), more than 85% of the money in circulation is kept outside the vaults of commercial banks, therefore it was necessary to redesign the naira because it had been so long since the notes had been updated, which is recommended to be done every 5 to 8 years. The amount of money in circulation has more than doubled, rising from N1.46 trillion in December 2015 to N3.23 trillion in September 2022. Data from the CBN shows an 11.07% increase in the value of cash kept outside of banks from the N2.54 trillion reported in a comparable time of 2021 Year-on-Year (Onimisi, 2023). The policy decision by the Central Bank of Nigeria (CBN) to redesign the N200, N500 and N1000 denominations was announced on October 26, 2022. This is in line with the CBN Act of 2007 which stipulates that the CBN shall oversee and administer all monetary and financial sector policies on behalf of the Federal Government of Nigeria (FGN). Section 18 (a) & (b) and Section 20 (3) of the Act empower the CBN to print, redesign, destroy, and re-distribute currencies. The national currency has been redesigned 16th time since 1959. Global best practice permits central banks to redesign, produce and circulate new local legal tender every five to eight years. The Nigerian apex bank was worried over the management of series of banknotes and currency in circulation, particularly those outside the banking system. The concern of the CBN was that the hoarding banknotes are over 85 percent of currency in circulation which are outside the vaults of our commercial banks (CBN, 2023a, 2023b; Emefiele, 2023). As at the end of September 2022, N2.73 trillion out of the N3.23 trillion currency in circulation was outside the vault of deposit money banks across the country (Emefiele, 2023). The CBN was also compelled to redesign the naira because of the prevailing level of insecurity (terrorism and kidnapping) situation in the country. The perpetrators were holding onto large volume of money outside the banking system which are used as source of funds for ransom. The redesigning of the naira notes was to help to curb the hoarding of currency due to corrupt practices that thrives in Nigeria. This necessitated the urgency to redesign the Nigerian legal tender, which the FGN expects to curb instances of hoarding, insecurity, and the bastardization of the Nigerian currency. The redesign of the currency generated divergent views on the appropriateness and timeliness of the policy. A withdrawal policy was later instituted by the CBN which restricted withdrawals from ATMs, point-of-sale devices, and over-the-counter locations to just N100,000 per week for individuals and N500,000 for corporate organizations. The withdrawal policy was later increased to N500,000 for individuals and N5,000,000 for corporate organizations. The Nigeria Governors’ Forum (NGF), the Bank Customers Association of Nigeria (BCAN), the House of Representatives and the Senate urged CBN in separate statements expressed concerns and appealed for the CBN to extend the deadline for change of old to newly designed currency notes. The President of Nigeria later approved a 10-day extension of the expiry date of the old naira notes from January 31, 2023, to February 10, 2023. The extension of the deadline was to allow for collection of more old notes legitimately held by Nigerians. The currency redesign policy was targeted at addressing the current blow of insecurity, corruption and economic sabotage among other actions of some Nigerians especially the politicians. The redesign of currencies improves the security of legal tender by enabling countries to prevent counterfeit currencies and their threats on sustainable development (Aroghene, 2023). Consequently, policy makers and researchers have recognized currency redesign over a period of time for global competition. 1.2 Statement of the Problem The redesign of Nigeria’s highest denomination banknotes led to an unexpected cash shortage, making transactions via e-banking channels difficult, especially for segments of the population who rely on physical currency. This has raised concerns about the country’s infrastructural readiness for a cashless economy and the potential adverse effects on economic activities. Some members of the political class in Nigeria criticized the currency redesign program, alleging that it was a deliberate attempt by the government to render politicians bankrupt ahead of the 2023 general elections. This raises questions about the government’s motives and the potential politicization of monetary policies. The currency redesign program received mixed reactions from Nigerians, with some questioning its necessity and effectiveness. Critics argue that the new notes were merely "recolored" versions of the old notes rather than true redesigns, highlighting concerns about the transparency and efficacy of the program. The CBN cited concerns about the significant amount of currency hoarded outside the banking system, estimated at over 85% of the total cash in circulation. The redesign was intended to address issues such as hoarding, counterfeiting, and insecurity associated with large volumes of cash held outside formal financial institutions. The redesign of currency notes was also prompted by concerns about the role of large volumes of cash in fueling insecurity, terrorism, kidnapping, and corrupt practices in Nigeria. The redesign aimed to curb these illicit activities and strengthen the integrity of the Nigerian currency. Overall, the research problem centers on the implications and effectiveness of the currency redesign program implemented by the CBN, including its economic, political, social, and security ramifications. It raises questions about the rationale behind the program, its execution, and its impact on various stakeholders in Nigerian society. 1.3 Research Objectives The general objective of the study is to assess the economic and operational implications of redesigning old currency notes in the Nigeria banking sector. The specific objectives were to: 1. Find out factors responsible for redesigning of old currency notes in the Nigerian banking system. 2. Determine the economic implications of redesigning of old currency notes in the Nigerian banking system. 3. Assess the operational implications of redesigning of old currency notes in the Nigerian banking system. 1.4 Research Questions The following questions will be answered in this study: 1. What are the factors responsible for redesigning of old currency notes in the Nigerian banking system? 2. What are the economic implications of redesigning of old currency notes in the Nigerian banking system? 3. To what extent are the operational implications of redesigning of old currency notes in the Nigerian banking system? 1.5 Research Hypotheses The following hypotheses have been formulated to guide the study in their null form: H₀₁: There are no significant factors responsible for redesigning of old currency notes in the Nigerian banking system H₀₂: There is no significant economic implication of redesigning of old currency Notes in the Nigerian banking system H₀₃: There is no significant operational implication of redesigning of old currency notes in the Nigerian banking system 1.6 Scope of the Study This study focuses on the economic and operational implications of redesigning old currency notes in the Nigeria banking sector. It lays emphasis on factors responsible for redesigning of old currency notes in the Nigerian banking system, the economic implications as well as the operational implications of redesigning of old currency notes in the Nigerian banking system. The geographical scope is selected commercial banks in Umuahia. 1.7 Significance of the Study By examining the impact of the currency redesign program on banking and financial institutions, the study can inform policymakers and regulators about the effectiveness of such initiatives in achieving their intended objectives. This can guide future policy decisions related to currency management, financial stability, and economic development. Understanding how banks and financial institutions have adapted to the currency redesign program can provide valuable lessons for enhancing resilience and risk management practices within the sector. This can help institutions better prepare for and mitigate the impact of future regulatory changes or disruptions. The study's findings on customer experience and satisfaction with banking services post-redesign can help financial institutions identify areas for improvement and enhance their service delivery to meet customer expectations. This can contribute to building trust and loyalty among customers, ultimately strengthening the competitiveness of banks in the market. By analyzing how banks have leveraged technology to adapt to the currency redesign program, the study can highlight innovative practices and solutions that have emerged in response to regulatory changes. This can inspire further innovation within the sector and drive advancements in financial technology (fintech) and digital banking. 1.8 Organization of the Study Chapter 1: Introduction This chapter introduces the research topic, outlines the problem statement, objectives, research questions, hypotheses, scope, significance, and limitations of the study. It also provides an overview of the organization of the subsequent chapters. Chapter 2: Review of Related Literature The literature review explores currency redesign, its historical context, economic and operational implications, and its impact on the banking sector, drawing from relevant scholarly works and studies. Chapter 3: Research Methodology This chapter details the research design, population and sample selection, data collection methods, variables, measurement tools, data analysis techniques, and ethical considerations employed in the study. Chapter 4: Data Analysis and Findings Findings from data analysis are presented, focusing on the economic and operational implications of currency redesign on the Nigeria banking sector. Descriptive analysis, economic implications, operational implications, customer perception, and financial stability are discussed. Chapter 5: Conclusion and Recommendations The study concludes with a summary of findings, conclusions drawn, implications for banking institutions, policy recommendations, practical recommendations, and suggestions for future research. CHAPTER TWO REVIEW OF RELATED LITERATURE 2.1. Conceptual Literature 2.1.1. Currency Redesign Currency redesign policy is usually informed by disequilibrium in the macroeconomic fundamentals of countries basically on the basis of poor macroeconomic performance especially hyper-inflation (Nwafor, 2018; Olujobi & Chuba, 2023). Nations redesign and recirculate their currencies due to various reasons. Some countries for instance redesign their legal tenders to prevent currencies’ counterfeits. Such redesign develops security of the currencies by keeping counterfeiting low. Another reason for currency restructuring and redenomination is to provide a platform for broad package of economic and political reforms and restoration of credibility of the currency with a view to combating hyperinflationary pressures (Somoye & Onakoya, 2013). Some countries had adopted currency redesign and this policy in the countries had been implemented as far back as 19th century. The Indian government in 2016, redesigned her currencies by reducing the amount of money in circulation through withdrawing and reintroducing the 500 and 1000 denominations of the Indian rupee. Nwachukwu and Nwogu (2023) posited that the effect of the policy may lead to low level of inflation in the future. Currency management may not impact negatively on inflation but the multiplier effect of the policy could have negative consequences in the overall economy (Ochei, 2022). For instance, in some Latin American countries and Africa, the policy might precipitate other negative economic consequences that might defeat the objective of the policy whenever implemented (Ochei, 2022). The Bank of England is responsible for producing and issuing banknotes in England and Wales. The most recent series of Bank of England banknotes, technically known as Series G, was launched over a five-year period, between 2016 and 2021. This series is the first that was printed on polymer. A new 5 pound was issued in September 2016. The legal tender status of paper five was withdrawn in May 2017, while new 10 pound was issued in September 2017. The legal tender status of paper 10 pound was withdrawn March 2018, new 20 pound issued February 2020 and new 50- pound issued June 2021. Legal tender status of paper 20 pound and 50 pound were withdrawn on September 2022. Following the death of Queen Elizabeth, the Bank of England unveiled the design of King Charles III banknotes on December 20, 2022. In April 1984, the colours of all the banknotes in circulation in Nigeria were changed with the exception of the 50 Kobo banknote to arrest the currency trafficking prevalent at the time. In 1991, the 50K and ₦1 were both coined. On 1st July, 1959 the Central Bank of Nigeria (CBN) issued Nigerian currency banknotes, while the WACB-issued banknotes and coins were withdrawn. It was not until 1st July, 1962 that the currency was changed to reflect the country’s republican status. The banknotes which bore the inscription, ‘FEDERATION OF NIGERIA’, now had, ‘FEDERAL REPUBLIC OF NIGERIA’, inscribed at the top. The notes were again changed in 1968 following the misuse of the currency banknotes during the civil war. Sequel to the decision by the government to change from the metric to decimal, the name of the Nigerian currency was changed in January, 1973. The major unit of currency which used to be £1 ceased to exist and the one naira which was equivalent to ten shillings became the major unit, while the minor unit was called the kobo; hundred of which made one naira. On 11th February 1977, a new banknote with the value of twenty naira (20) was issued. It was the highest denomination introduced at the time as a result of the growth of the economy; the preference for cash transactions and the need for convenience. The banknote was the first in Nigeria to bear the portrait of a prominent Nigerian citizen, the late Head of State, General Murtala Ramat Muhammed (1938-1976) who was the torch bearer of the Nigerian Revolution in July, 1975. The note was issued on the 1st anniversary of his assassination as a fitting tribute to a most illustrious son of Nigeria. He was declared a national hero on 1st October 1978 (CBN, 2015). On 2nd July, 1979, new currency banknotes of three denominations, namely ₦1, ₦5 and ₦10 were introduced. These notes were of the same size i.e. 151 X 78 mm as the ₦20 note issued on 11th February, 1977. In order to facilitate identification, distinctive colours were used for the various denominations. The notes bore the portraits of three eminent Nigerians, who were declared national heroes on 1st October, 1978. The engravings at the back of the notes reflected various cultural aspects of the country (The Guardian, 2022). In April 1984, the colours of all the banknotes in circulation were changed with the exception of the 50 Kobo banknote to arrest the currency trafficking prevalent at the time. In 1991, the 50K and ₦1 were both coined. In response to the expansion in economic activities and to facilitate an efficient payments system, the ₦100, ₦200, ₦500 and ₦1000 banknotes were introduced in December 1999, November 2000, April 2001 and October 2005 respectively (CBN, 2015). On 30th September, 2009 the redesigned ₦50, ₦10 and ₦5 banknotes were converted to polymer substrate following the successful performance of the ₦20 (polymer) banknotes. Thus, all lower denomination banknotes were now printed in the polymer substrate. Finally, the CBN, as part of its contribution towards the celebration of the nation’s 50th anniversary of Nigeria’s Independence and 100 years of its existence as a nation, issued the ₦50 Commemorative polymer banknote on 29th September, 2010; and the ₦100 Commemorative banknote on 19th December, 2014 respectively. The Central Bank of Nigeria Governor, Godwin Emefiele observed that over three trillion-naira notes are supposedly in circulation but merely a trillion have been accounted for by the banks. So, the presumption is that the remaining unaccounted couple of trillions are stockpiled somewhere. In 1965, the Nigerian redesigned currencies’ policy was first implemented when Nigeria became a federal republic (Pillah, 2023). The leading purpose for redesigned of the currencies was to reflect the ownership as that of the Federal Republic of Nigeria. In 1968, the Nigerian currency was redesigned due to a civil war in Nigeria as a war tactic to counteract the misuse of the country’s currency notes during the war. In 1973, Nigeria implemented a genuine monetary system in decimal form to replace the imperial system inherited from the British colonial administration leading to another form of a currency redesign (Aroghene & Akpoyibo, 2023). In 2007, as part of the economic reforms implemented, the Nigerian banknotes were redesigned. In 2023, new banknotes was introduced to limit counterfeit currencies, stimulate a cashless economy, reduce the large quantity of dirty banknotes that was circulating in the economy as well as reducing illegal financial transactions. The new currencies policy can also address the high amount of currency outside the deposit money banks. The CBN Act of 2007 stipulates that CBN shall oversee and administer all banks. The CBN Act of 2007 stipulates that CBN shall oversee and administer all monetary and financial sector policies in Nigeria (Somoye & Onanuga, 2013). This is to ensure monetary and price stability; to issue legal tender currency in Nigeria; maintain external reserves to safeguard the international value of the legal tender currency; promote a sound financial system in Nigeria; and act as a banker and provide economic and financial advice to the federal government. The Section 18 (a) & (b) and Section 20 (3) of the Act empower the CBN to print, redesign, destroy, and re-distribute currencies. The redesigning of the currency will help curb the hoarding of currency against corrupt practices in Nigeria where some people keep large sums of money in soak-aways, overhead tanks and unoccupied buildings. The CBN also instituted a withdrawal policy that restricted withdrawals from ATMs, point-of-sale devices, and over-the-counter locations to just N100,000 per week for individuals and N500,000 for corporate organizations, but it was increased to N500,000 for individuals and N5,000,000 (CBN, 2022; Fate Foundation, 2023). This was later reduced to N10,000 and N5000 in some instances. The CBN directed deposit money banks to stop handing out new, redesigned notes over the counter and to reload ATM machines instead to aid circulation at the beginning of this year (Fasua, 2023). However, because there is an insufficient supply of new notes, banks are left with old notes that they must load into ATM machines. This is despite the announcement that all Nigerians should deposit old notes as they will no longer be accepted as legal tender as of January 3, 2023. The deadline was later postponed to December 31, 2023. A number of studies had been carried out on the effect of currency redesign policy on the general performance of the Nigerian economy. For instance, Onimisi (2023) examined the implication of currency redesign on socio-economic development in Nigeria. Pillah (2023) evaluated the currency redesign and monetary policy of Nigeria while Olujobi and Chuba (2023) examined the macroeconomic implications of the new currency refurbishment and capital formation in Nigeria. 2.1.2. Economic Implications The 2022 Naira Redesign Program was not created or carried out at the discretion of the CBN Management or even the Presidency. It was rather predicated on the Apex Bank’s comprehension of the local circumstances and international best practices that made currency redesign necessary. The Naira redesign program had five main objectives: to improve the management of Nigerian currency; to advance the movement toward a cashless and digital economy; to lower the incidence of terrorism and kidnapping; to adhere to international best practices of redesigning national currencies every five to eight years; and, subtly, to sanitize the 2023 general elections. Excessive currency hoarding and the widespread use of counterfeit Naira throughout the nation, which the CBN identified as the fundamental driving forces behind the initiative, are the principal obstacles to these ultimate aims. But the question still stands: did the program succeed in achieving its objectives after the three months (October 26, 2022 – February 10, 2023) during which it was intended to be implemented had passed? The hoarding of banknotes was at its height when the program began in October 2022, particularly among the elite corps of the nation. According to data made public by the CBN, at the time the initiative was introduced, more than 85% of the currency in use was purportedly kept by the general public outside of commercial banks' vaults. The CBN Governors stated that "at the end of September 2022, available data at the CBN indicates that N2.73 trillion out of the N3.23 trillion-naira currency in circulation was outside the vaults of commercial banks across the country" (CBN, 2022: 2-3). There was just N500 billion in the financial system. The management of the apex bank was required to begin currency redesign as a means of ensuring effective currency management due to this challenge and the rapid increase in the amount of currency in circulation, which increased from N1.46 trillion in December 2015 to N3.23 trillion as of September 2022. The CBN had recovered 75% (N1.9 trillion) of the N2.73 trillion in old notes that were outside the banking system when the program was launched between the program's inception in October 2022 and the 29th of January 2023 (eleven days before the deadline for the demonetization of the old notes, which was set for February 10th) (CBN, 2023: 3). Only N400 million of the new notes were distributed by the Apex Bank to replace the N1.9 trillion in old notes that it recouped in accordance with the cashless policy. Additionally, it set weekly caps on the number of brand-new notes that people and organizations could withdraw (CBN, 2022). Over-the-counter cash withdrawals by individuals and businesses were initially limited to N100,000 and N500,000, respectively, by the CBN. However, in accordance with the National Assembly's directions, the cap was increased to N500,000 for individuals and N5,000,000 for organizations (Adegboyega, 2022). The CBN’s attempt to force Nigeria into a cashless economy resulted in a cash crunch that was unprecedented and exposed the country’s e-banking channels’ limitations: commercial banks could only disperse a certain amount of cash through ATMs, and mobile banking apps were rendered useless due to the high volume of electronic transactions that the cash crunch required. The grave situation brought on by the lack of cash was documented in an article titled "Nigeria's Season of Cash Scarcity" at the height of the cash crunch, which lasted throughout February and March 2023. According to what he said, bank-run digital payments are frequently unreliable, which causes businesses to struggle as more and more customers struggle to obtain cash to pay for goods and services. Due to the circumstance, fresh banknotes can now be sold on the black market. Businesses all around the nation have been affected by the cash shortage, and many have had to close. Trade and commerce, along with agriculture, are two crucial components of the economy that have been severely impacted because most of their transactions take place in cash, particularly in rural areas. Rural economic activity has ceased as a result of this approach (Morphy, 2023). The administrations of Kaduna, Kogi, and Zamfara States filed a lawsuit before the Supreme Court protesting the program’s haphazard implementation due to the negative consequences of cash shortage on the local populace. The court decided on March 3 to reinstate the old notes into circulation and declare them to be valid until December 31, 2023 (Olabimtan, 2023). Overall, however, the program has unintentionally encouraged cash hoarding: while the elites used every trick in the book to obtain and hoard the new notes from the commercial banks, rural residents no longer have faith in banks and are unlikely to deposit their money there because of the perception that it is difficult to access banked funds in times of need. The program also failed to control vote-buying and bribery during the general elections of 2023. The lack of funds hindered the smooth delivery of election officials and materials to polling units during the presidential and National Assembly elections on February 25 as well as the gubernatorial and state assemblies’ elections on March 18. Politicians utilized wrappers, food items, bank transfers, and hard money like the CFA Franc and the US Dollar to bribe election authorities and buy votes during the cash constraint (Ndujihe, 2023). When the initiative began in October 2022, Naira counterfeiting was on the rise. "Recent advances in photographic technology and advancement in printing devices have made counterfeiting relatively easier," said CBN Governor Godwin Emefiele. Particularly at the higher values of N500 and N1000, the CBN has observed a markedly greater rate of counterfeiting in recent years (CBN, 2022). The extent of money fraud in Nigeria supported the governor of the Central Bank of Nigeria’s assertion. For instance, media sources state that the CBN seized around N64.7 million in fake cash just this year. Following that, the CBN seized a total of 67,265 counterfeit banknotes in 2020 with a nominal value of N56.8 million. The N1000 and N500 made up the majority of the confiscated counterfeit currency in the year 2020, accounting for 69.06% and 30.79% respectively, according to the apex bank’s 2020 annual report (CBN, 2021). For instance, the trends in 2019 and 2020 are significantly different from what was observed in 2016, when, according to a press release signed by Isaac Okorafor, the CBN’s Acting Director of Corporate Communications, "the prevalence of counterfeit notes in Nigeria from January to December 2016 was less than one per cent, precisely 0.0014%." (CBN, 2016: 1). Although counterfeit new notes were discovered in use a few weeks after the new notes went into circulation (Nweze, 2022), the pursuit of cashless transactions greatly lowers the likelihood of counterfeiting. When a sizable portion of Nigerians start using the e-Naira, which is exceedingly difficult, if not impossible to counterfeit, this will become much more effective. The Naira redesign program was somewhat ambitiously intended to speed up the process of reducing abduction and terrorism; the goal was to decrease the number of notes in circulation to lessen the likelihood of paying ransom (CBN, 2022). Of course, this program’s goal suffered significant setbacks as a result of terrorists’ varied attempts to demand ransom in other currencies, like the CFA Franc. In fact, a popular video from January 2023 showed some terrorists displaying the new currency in the woods. However, a widely reported incident where members of the infamous Islamic State West Africa Province (ISWAP) blocked a highway in Borno and gave N100,000 of the old notes to each passenger demonstrated its limited success (Okoye, 2023). This was likely due to their concern that the old notes might expire while in their possession. The National Bureau of Statistics reports that in January 2023, Nigeria’s inflation spiked to 21.82 percent. The Central Bank of Nigeria is redesigning the naira at the same time as this. The inflation rate for January was 0.48 percentage points higher than the 21.34 percentage point reading for December 2022 (Punch, 2023). Lack of the newly designed notes led to an artificial inflation that increased prices for goods and services, including the purchase of naira notes, rather than reducing inflation. The paucity of new banknotes and the fuel hoarding hurt small, medium, and big enterprises in both the formal and informal sectors of the economy. The trade and agricultural subsector were severely hampered by the naira redesign policy’s debilitating effect. Additionally, it had a spillover effect on other significant economic sectors, including the services industry and the manufacturing value chain. The trade end of the chain has been severely interrupted by the currency swap issue due to the limited supply of new naira notes. For instance, the commerce industry provides roughly 14% of the country’s Gross Domestic Product (GDP), which is estimated to be worth N35 trillion. The agricultural sector is expected to be worth N62 trillion and accounts for around 25% of the country’s GDP. The majority of these sectors' activities either take place in rural areas or in the unorganized sector of the economy. Since the COVID-19 pandemic outbreak in 2020, these are the sectors that have helped the economy remain resilient in the face of multiple internal and international challenges. Since the shortage of the new naira notes and the fuel shortage began, the informal sector has seen a drop in sales of consumer goods of about 20% and the manufacturing sector of 30%, according to statistics from the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) (NACCIMA, 2022). The majority of the GDP is contributed by these industries. Businesses and individuals have experienced significant distortions as a result of the lack of petroleum goods. Investment has also suffered as a result of it. According to estimates, the crisis might have endangered Nigeria's N100 trillion shares of the country's GDP. The country's supply chain was actually affected at the trading end. This is a result of the industrial sector's output not being sold due to a lack of funding to move the goods. Unpredictability characterized the chain reaction (The Sun, February 14, 2023). 2.1.3 Factors that Contributed To The Failure of the Currency Redesign Regime Politics: The political twist made the policy more complex. The President had declared that he intended to deny money to lawmakers for the 2023 election in an effort to establish a legacy of "free and fair elections." This amounted to utilizing the CBN as a political tool and complicated the situation for the CBN Governor, who had attempted to run for president of the ruling party. The CBN Governor was the target of a lot of criticism. Politicians still prevailed over the system, though. They allegedly negotiated deals and paid the initial disbursements without passing their stashes via any bank accounts (Fasua, 2023). Demographic and Sociological Changes Since 1984: It was evident from the policy’s immediate results how Nigeria had undergone both demographic and sociological change since the previous time a similar exercise was carried out. These are important things to take note of, ranging from point of sale (PoS) operators taking advantage of fellow Nigerians to the exaggeration of problems that sparked panic and rioting to the reality that Nigerians are now lot less patriotic and impatient. Additionally, Nigerians have grown more fearless and despised authority, making them harder to manage (Fasua, 2023). Banking Superstructure and Modernity: It is tragic that there are now fewer banks in Nigeria’s rural areas than there were in 1984, 39 years ago. This was once more revealed by the currency redesign process, which is useful information for the Central Bank of Nigeria. In 2005 and 2006, banks were combined in an effort to make them stronger and more efficient. However, this consolidation led to the creation of too-big-to-fail banks, which had to be saved with taxpayer money in 2011 due to overtrading. There appears to be some peace on that front now, although these bigger banks had shuttered their operations in rural areas mostly because of insecurity. Also closed were numerous branches that were judged unprofitable. The currency swap exercise also demonstrated that alternatives to traditional banking have yet to gain traction because they were unable to quickly recover. In Nigeria, many local governments don’t even have any bank relationships. The federal government should take note of this. Moving forward, there must be some choices. Since most failed owing to poor business strategies and selfishness, microfinance or community bank models might be reconsidered (Fasua, 2023). The Wages of Illiteracy and Poverty and the Widening Income Divide: The fact that the income gap appears to have grown into a canyon is another lesson to be learned from the currency exchange exercise. Where ATMs are present around the nation, large crowds of people lined up (or rather mobbed) them to withdraw extremely meager sums. As those who were more comfortable lack the funds to tip those who had little, the issue of poverty is increasingly exposed. Even when they did, they spent money more slowly by nature. The activity exposed how little had been done to address the problems of poverty and illiteracy as well. If they had accounts at all, many of those who smashed bank branches likely had nothing in them (Fasua, 2023). 2.1.4. Role of the Banking Sector Redesigning old currency notes is a significant endeavor for any country’s monetary system, with implications for economic stability, operational efficiency, and financial inclusion. In Nigeria, the banking sector plays a pivotal role in facilitating this process, ensuring a seamless transition between old and new currency denominations while maintaining the integrity of the financial system. Banks are directly involved in implementing currency redesign directives issued by the Central Bank of Nigeria (CBN). According to Smith (2019), banks are mandated to comply with CBN regulations regarding the withdrawal of old currency notes from circulation and the introduction of new ones. This involves adjusting internal processes and systems to accommodate the transition effectively. Banks serve as primary points for exchanging old currency notes with new ones. According to Johnson (2020), banks facilitate the exchange process for customers, ensuring a smooth transition between the old and new currency denominations. This exchange function is crucial in managing liquidity and maintaining public confidence in the currency. Redesigning old currency notes requires efficient cash management by banks. As noted by Okonkwo (2018), banks must adjust their cash handling processes to accommodate the transition, ensuring that ATMs, branches, and other service points are adequately stocked with the new currency notes. Effective cash management is essential for preventing disruptions in financial transactions. Banks play a critical role in maintaining the security of currency during the redesign process. According to Adewale et al. (2017), banks need to implement robust security measures to safeguard both the old currency notes being phased out and the new ones being introduced. This includes measures to prevent counterfeiting, theft, and fraud. Banks are responsible for educating their customers about the currency redesign and its implications. According to Mohammed (2019), banks must inform customers about exchange procedures, changes in currency features, and potential scams or fraud attempts. Effective customer education is essential for maintaining public confidence and preventing misunderstandings during the transition period. 2.2. Theoretical Framework Transaction Cost Economics Transaction cost theory aims to answer the question of when activities would occur within the market and when they would occur within the firm (Williamson, 1991). More specifically, transaction cost theory predicts when the governance forms of hierarchies, markets, or hybrids (e.g., alliances) will be used. Williamson, who was recognized with a Nobel Prize for his work on transaction costs, theorized that whether activities would be internalized within a firm depended on their transaction costs. He saw transactions broadly as transfers of goods or services across interfaces, and argued that when transaction costs were high, internalizing the transaction within a hierarchy was the appropriate decision. Conversely, when transaction costs were low, buying the good or service on the market was the preferred option. Three dimensions were developed for characterizing transactions: uncertainty, frequency, and asset specificity, or the degree to which transaction-specific expenses were incurred. Transaction cost theory is built on assumptions of bounded rationality and opportunism, defined as self-interest with guile. this theory suggests that conducting transactions is a costly endeavor (e.g., negotiating contracts, monitoring performance and resolving disputes) and different modes of organizing transactions (e.g., within a market or a firm) entail different costs (Coase 1937). Hence, according to this theory, a comparative examination of the relative transaction costs (or their indicants) of these alternative modes reveals how a particular transaction should be conducted (Williamson 1985). TCT rests upon several key assumptions about human behavior and environmental characteristics (Williamson, 1979; Williamson & Ouchi, 1981; Williamson, 1985). These assumptions elucidate why firms may face superior costs for market-based transactions and why firms may be relatively more efficient than markets at organizing transactions. The firm - 8 - will select the governance form, from the various alternatives amongst the organizational menu, that minimizes transaction and production costs. Assumptions about human and human behavior Opportunism with guile. In neoclassical economics, humans are viewed as self-interested; individuals pursue their own self-interest in their own activities (i.e., simple self- interest according to Williamson (1985)). Opportunism with guile takes this assumption a step further to assume that individuals may engage in behavior that is both subtly and overtly deceitful ex ante and ex post to agreeing on contracts. As Williamson (1985: 48) puts it “Plainly, were it not for opportunism, all behavior could be rule governed”. In fact, it is precisely because sometimes some individuals behave opportunistically that there are costs to exchange (e.g., contracts can not be written and enforced perfectly or costlessly). The opportunism assumption is about the motivations of human behavior (Williamson, 1985). This assumption is central to TCT because, in the absence of potentially opportunistic behaviors, contracts would be costlessly enforced and there would be no reason for other forms of economic organization besides the market. Bounded rationality. The neoclassical theory assumes that individuals have perfect information and act as utility maximizers with calculative rationality. In sharp contrast, the TCT views human as boundedly rational - individuals are “intendedly rational, but only limitedly so” (Simon, 1961 as cited in Williamson, 1985). Bounded rationality reflects individuals’ inability to process large degrees of information and their difficulty in assigning probability values to the occurrence of future events. It is worth noting that bounded rationality does not imply that individuals seek to be irrational. In fact, they seek to make rational decisions but within the limits of their imperfect cognitive abilities and in conditions of imperfect information. Assumptions about environmental characteristics Asset specificity. Williamson defined asset specificity as “durable investments that are undertaken in support of particular transactions, the opportunity cost of which investment is much lower in best alternative uses or by alternative users should be original transaction be prematurely - 9 - terminated” (1985: 55). In contrast to the neoclassical economics which treats exchanges of standard nature, transactions according to TCT often involve idiosyncratic attributes so that contracts cannot be written costlessly due to, for example, the unknown idiosyncrasies beforehand. In this respect Williamson (1985: 53) states that “[transactions that are supported by investments in durable, transaction-specific assets experience ‘lock in’ effects, on which account autonomous trading will commonly be supplanted by unified ownership]”. Hence contractual and organizational safeguards (i.e., firms) become necessary for transactions involving these nonstandard assets. Transaction costs theory focuses rather strongly the asset specificity and its role in determining how to better organize exchanges. The broad advice is that when assets are not specific to an exchange the market may be the most efficient way (or the best way for minimizing costs) to organize it. The asset specificity makes specific reference to the extent to which an asset can be redeployed to alternative uses and/or by alternative users without a substantial sacrifice of its productive value (Williamson, 1989: 141). And, it is possible to distinguish six different types of asset specificity: site specificity, physical asset specificity, human asset specificity, dedicated assets, brand name capital and temporal specificity (Williamson, 1989: 141- 142). The degree of asset specificity ranges from nonspecific to mixed to idiosyncratic (Williamson, 1979, 1985). The asset specificity assumption might be called the locomotive or driving assumption of TCT as Williamson himself states “the importance of asset specificity to transaction cost economics is difficult to exaggerate” (1985: 56). Uncertainty. Uncertainty is a straightforward assumption and it contrasts with the perfect-information assumption of the neoclassical view. Information about past, current and future states is not perfectly known, for various reasons. Without the existence of bounded rationality and opportunism, uncertainty would be much less of a problem because general rules would generally prevail (Williamson, 1985). However, given these assumptions uncertainty is especially critical. Uncertainty arises from, for example, not knowing about future states or/and the inability to determine who is more prone to behave opportunistically (Williamson, 1993b). Because it is very difficult to determine ex ante who will engage in opportunistic behavior, contracts are not costlessly written and enforced (Williamson, 1993b). Frequency of the transactions. If transactions are infrequent then the costs of alternative governance structures may not be justified. A larger frequency or larger volumes of transactions, however, gives rise to justification for alternative governance structures such as the firm. Therefore the volume, number, and/or temporal spread of transactions are important to be considered because even given the previous assumptions if they are infrequent alternative governance structures may not be necessary or feasible. The degree of frequency ranges from occasional to recurrent (Williamson, 1979, 1985). In sum, Williamson (1975) identified three determinants of the transaction costs: (a) the agents’ bounded rationality, that originates incomplete contracts due to the impossibility of foreseeing, in the contracting moment, all future situations; (b) opportunism that is originated when one of the partners pursues his own short-term self-interest; and (c) the assets specificity, this originates that the owners of production factors will incur costs if they deviate the assets to another use, and leads to the conclusion that the best use is improved by internalization. Internalization will be preferred to externalization if three conditions are verified: (A) The degree of the transaction uncertainty is high - that is, if it’s difficult to guarantee the execution of the contract - the supplier may have an opportunistic behavior that impairs the customers; (B) If the assets involved in the transaction are specific - if just a restricted number of suppliers possess the necessary equipment to the accomplishment of the activity, his bargaining power increases - affects negatively the price of the transaction; (C) If the transaction is the recurrent type, that is, if the firm has to buy regularly large quantities of the product to the suppliers these will be able to demand better conditions. Governance implications The main governance implication of TCT is that the most efficient governance structure for organizing economic exchanges will depend on several characteristics of the transactions themselves. For instance, - nonspecific transactions of both occasional and recurrent contracting will be principally governed by the market. As assets became more and more specific, other forms of governance will be needed ranging from trilateral to unified governance structure (the firm) (Williamson, 1979, 1981, 1985). Williamson (1979, 1985) argued that asset specificity actually drives vertical integration, which contrasts with the traditional arguments of monopolistic market power. This has important policy implications because vertical integration is often viewed as being anti-competitive and subject to anti-trust litigation. When the transaction cost logic is applied and the concept of relative efficiency is introduced the benefits of vertical integration are more clearly understood (Williamson, 1979, 1985; Klein & Shelanski, 1994). Theoretical Framework: Transaction Cost Economics Perspective Transaction Cost Economics (TCE) provides a useful lens through which to analyze the economic and operational implications of redesigning old currency notes in the Nigeria banking sector. TCE, developed by Nobel laureate Oliver Williamson, posits that economic transactions incur costs beyond the actual price of goods or services exchanged. These transaction costs include search and information costs, bargaining and negotiation costs, and enforcement and policing costs. In the context of currency redesign, TCE helps elucidate how changes in transaction costs can influence the behavior of banks, customers, and other stakeholders. 1. Search and Information Costs: Redesigning old currency notes may entail significant search and information costs for banks and customers. Banks must communicate information about the currency redesign to their customers, including the timeline for exchanging old notes, the features of the new currency, and any procedural changes. This communication process requires resources for advertising, customer education, and staff training. Similarly, customers incur search costs in learning about the currency redesign and determining how it affects their financial transactions. Failure to effectively communicate information about the currency redesign can lead to confusion and inefficiencies, increasing overall transaction costs. 2. Bargaining and Negotiation Costs: Currency redesign may also affect bargaining and negotiation costs within the banking sector. Banks may need to renegotiate contracts with suppliers of cash handling equipment and security services to accommodate the changes in currency design. Additionally, banks may face increased bargaining power from customers demanding compensation for the inconvenience caused by the currency redesign, such as longer wait times at branches or temporary unavailability of certain denominations. Managing these negotiation processes effectively is crucial for minimizing disruptions and maintaining operational efficiency. 3. Enforcement and Policing Costs: Ensuring compliance with the new currency design involves enforcement and policing costs for banks and regulatory authorities. Banks must implement measures to detect and prevent the circulation of counterfeit currency during the transition period. This may require investment in upgraded counterfeit detection technology, additional training for staff, and enhanced security protocols. Regulatory authorities, such as the Central Bank of Nigeria, play a crucial role in enforcing compliance with currency redesign regulations and addressing any violations or fraudulent activities. Failure to adequately enforce compliance can undermine the integrity of the currency and erode public trust in the banking system. From a TCE perspective, the economic and operational implications of redesigning old currency notes in the Nigeria banking sector hinge on effectively managing transaction costs. To mitigate the adverse effects of transaction costs associated with currency redesign, banks and policymakers can take several actions: 1. Invest in comprehensive communication strategies to minimize search and information costs for customers. 2. Proactively negotiate contracts with suppliers and stakeholders to mitigate bargaining and negotiation costs. 3. Allocate resources for robust counterfeit detection measures and regulatory enforcement to reduce enforcement and policing costs. 4. Embrace technological innovations to streamline currency handling processes and improve operational efficiency. By adopting a transaction cost perspective, stakeholders can better understand the economic dynamics of currency redesign and implement strategies to navigate its challenges effectively, ultimately contributing to the stability and efficiency of the Nigeria banking sector. CHAPTER THREE METHODOLOGY 3.1 Research Design Research design is defined as the strategy which is adopted by the researcher to integrate the various components of the study in a coherent and logical way, in order to address the problem of the research (De Vaus, 2001). The research strategy used in this study is survey research strategy which is commonly associated with quantitative research. This research technique allows data collected to be analysed using inferential and descriptive statistics. It is one of the most economical strategies used in research. Data that is reliable and can be generalized can be collected through the use of this method. This involves sampling that represents the total population (Bryman, 2012). Vast collection of data is permitted in attempting to answer the research questions and this makes it appropriate for this study. The research questions on knowing the factors that motivate employee for effective job performance is easily derived through the use of survey research strategy. 3.2 Sources of Data Data is defined as information and statistics collected for analysis. The sources of data used in this study are primary and secondary sources of data. Primary data are collected at source or in direct contact (Booth, 2008). Primary source of data used in this study is survey questionnaire designed to elicit information from employees of the company under study. On the other hand, secondary data which were used to supplement the work are those collected from already existing or documented event (Stewart and Kamins, 2013). Secondary sources of data used in this data were from journals, textbooks and peered review articles journals. 3.3 Population Population is defined as the entire aggregate of a specified set of elements in a defined environment (Polit and Hungler, 1991). The target population in this study is 237 staff of five selected banks in Umuahia which are Access Bank, Guaranty Trust Bank, United Bank of Africa, Union Bank of Nigeria plc and Zenith Bank of Nigeria Plc. 3.4 Sample size and Sampling Technique The study adopts Taro Yamen (1963) method to estimate the sample size. Thus it has a formula as: Thus it has a formula as: n = where n= sample size N= Population size e = Level of significance = 5% and N = 237 e = 0.05 n = n = n = n = n = 148.82 = 149 So a sample size of 149 were used in the study. Sampling according to Burns and Grove (2003) is the process of selecting an item or subjects as representatives from a given population that is being studied. The sampling technique adopted is purposive sampling technique which involves selection of data based on access. This was used because of the willingness of the respondents to fill out the copies of questionnaire. 3.5 Instrument of Data Collection Data collection is the systemic process adopted in gathering of data from the source which are relevant to the research aim, objectives and questions (Burns and Grove, 2001). The method of data collection is structured questionnaire. The questionnaire was structured into four sections which are aimed at meeting the objectives of the research. Section one raises questions to find out the demographic information of the respondents. Section B, C and D focuses on the objectives of the study. The questions were also designed into six Likert format as follows: Very high = 6 High = 5 Undecided = 4 Very much undecided = 3 Low = 2 Very low = 1 3.6 Data Collection Procedure The first step taken by the researcher was to reach out to the management of the banks on the intention of the researcher and essence of the research itself. After proper introduction and explanation, information on the number of employees and top management under the payroll of the banks were provided. Consequently, further reach was made to the managers of the various banks which assisted in selecting participants who are willing to fill out the questionnaire. The survey was completed by the selected employees while the responses were downloaded, coded and analysed to answer the questions raised in the study. 3.7 Reliability and Validity Validity is defined as the degree to which an instrument measures what it is supposed to measure (Polit and Hungler, 2001). To validate the instrument used in this study, the instrument was subjected to scrutiny by experts to validate the instrument and the supervisor was consulted to give a valid template of how the instrument should be. The corrections and suggestions made were effected before the actual administration of the questionnaire to the study participant. Reliability is defined as the consistency with which an instrument measures an attribute (Polit and Hungler, 2004). In establishing the reliability of the instrument, the researcher did a Pre-test of the instrument. The Pre-test is a process whereby the researcher administers the constructed questionnaire to 10% of the total study population in another representative population but the filled questionnaire for the pre-test was not be used in the final analysis of the work. The pre-test of the instrument was carried out among similar group in another organization, a similar population group; questions found to be unclear or unnecessary were modified or deleted accordingly. Appropriate corrections were captured subsequently to establish validity and reliability. A Cronbach Alpha measurement to determine the reliability co-efficient. The reliability obtained for this study was 0.893 indicating strong internal consistency of the instrument. The research assistants were also involved in the pre-test exercise as this provided them with practical experiences relating to the study. 3.8 Data Analysis Technique All completed survey was checked for completeness and consistencies. A coding guide was then developed to facilitate the entry of the responses into the statistical package. The responses provided the information which was entered into the computer and then Statistical Product for Social Science (SPSS) version 25 package was used for the analysis of the data that was collected. A 6-point rater scale was used. Analysis was carried out using descriptive statistics such as mean, median and mode and inferential statistics such as regression and correlation at 95% confidence interval. Mean scores of 3 were categorized as insignificant and significant respectively. The relationship between variables and categories were analysed using regression method of analysis at P