Growth Impact of Savings on the Nigerian Economy (2011-2020)

ABSTRACT

Savings in an economy can assume one of the several forms. These includes: Personal savings, corporate savings or business savings and Government savings. This study evaluated growth impact of savings on the Nigerian economy. The study specifically examined the effects of total savings, private consumption expenditure, gross fixed capital formation and core credit to the private sector on the gross domestic product of Nigeria. Data for the study were sources from CBN statistical bulletin for a period of ten (10) years spanning through 2011 to 2020.The sourced data were analyzed using multiple regression analysis, result of the analysis shows that total savings has positive and significant effect on the gross domestic product of Nigeria. It was also observed that private consumption expenditure has a negative and insignificant effect on the gross domestic product of Nigeria. The study further revealed that gross fixed capital formation has a negative and significant effect on the gross domestic product of Nigeria. It was also observed that core credit to the private sector has positive and significant effect on the gross domestic product of Nigeria. Based on the findings, the study recommends that the government should set a sound and fertile environment in order to foster domestic saving that will help to increase the level of economic growth in Nigeria. Government should increase the deposit rate of the deposit money banks in Nigeria through monetary policy. Government should transform the financial sector of the country. Government should create favorable condition in order to mobilize domestic savings from the small depositors.

Keywords: gross fixed capital formation, private consumption expenditure, and mobile domestic savings