SAVINGS, INVESTMENT AND ECONOMIC DEVELOPMENT IN NIGERIA
B.O. Osuka, Ihejirika, Peters O. and Obainoke Eromosele Felix
Volume 4 Issue 1
Abstract
The study investigated the relationship between savings, investment and economic development in Nigeria for a period of 33 years (1990 to 2022). The specific objectives of the study were to find out whether total consumption from GDP, Net Investment in Government non financial assets, government spending consumption expenditure and household final consumption expenditure (Private consumption), consumer price index and GDP deflator significantly affect economic development in Nigeria. To achieve this, the autoregressive distributed lags (ARDL) was employed for the analysis of data. The results obtained indicate that, in the short run, lagged GDPPC has significant positive impact on economic development; domestic savings (DSAV) has an insignificant negative impact on economic development, while lagged value of D(DSAV(-1)) has significant negative impact on economic development. On the basis of the long run, it was found that domestic savings (DSAV) has a weak negative effect on economic development; while investment (INV) and consumption level (CONS) have a strong negative and positive relationship with economic development. On the other hand, inflation rate (INFL) and interest rate (INTR) have weak negative effect on economic development in Nigeria in the long run. The study therefore recommends that, government and regulatory authority should create enabling environment for domestic investment to rise through the adoption of macroeconomic policies that will boost investment opportunities in the economy. This step is capable of ensuring that domestic investment has the much needed positive impact on economic development in Nigeria. Keywords: Consumption, Economic Development, Investment, Savings
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