IMPACT OF SAVINGS ON ECONOMIC GROWTH IN NIGERIA (1990 – 2020)
Solomon, Olubunmi, PhD
Volume 4 Issue 1
Abstract
The study analyzed the impact of National Savings on economic growth in Nigeria (1990-2020). Secondary data was adopted and sourced from CBN Statistical Bulletin (2020). Ordinary Least Square with the aid of E-view version 9 was used to determine the effects of National Savings on Gross Domestic Product. The study utilized Augmented Dickey-Fuller test, to verify, the stationarity of the variables so as to avoid spuriousness of empirical result. Time series techniques were used to determine the impact of National Savings (NS) on economic growth (GDP). The results of the unit roots test indicated that all other variables are stationary at first differences-I(1), therefore, I(1) series were adopted to test for co-integration using Johansen co-integration test. The result revealed that there is a positive and significant relationship between national savings and economic growth in Nigeria. However, a negative but significant relationship exists between inflation and economic growth in Nigeria. The study recommends that the policy makers should make concerted effort at improving the income of the citizens in order to improve their saving ability so as to increase the impact of national savings on economic growth. The Financial sector should be developed by both government and private sector so as to facilitate their accessibility in both urban and the rural areas. Government should make savings attractive through competitive interest rates and the existing saving schemes should be promoted to inculcate saving culture; since the relationship between savings and economic growth is inelastic as reported by the study. Keywords: National Savings, Economic Growth, Inflation, Gross Domestic Product
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