What Drives Private Saving in Nigeria
Loading...
Files
Date
2011-01
Authors
Nwachukwu, Tochukwu E.
Odigie, Peter
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This study discusses the trend in Nigerian saving behaviour and reviews policy options
to increase domestic saving. It also examines the determinants of private saving in
Nigeria during the 1970-2007 period. It makes an important contribution to literature
by evaluating the magnitude and direction of the effects of the following key policy and
non-policy variables on private saving: Income growth, interest rate, fiscal policy and
financial development. The framework for analysis involves the estimation of a saving
rate function derived from the life cycle hypothesis while recognizing the structural
characteristics of a developing economy. The study employs the Error-Correction
Modelling procedure which minimizes the possibility of estimating spurious relations,
while retaining long-run information. The results of the analysis show that the saving
rate rises with both the growth rate of disposable income and the real interest rate on
bank deposits. Public saving seems not to crowd out private saving, suggesting that
government policies aimed at improving the fiscal balance have the potential of bringing
about a substantial increase in the national saving rate. Finally, the degree of financial
depth has a negative but insignificant impact on saving behaviour in Nigeria.
Description
HC 1055 . Z9 S 359 2011
Keywords
Saving anad investment - Nigeria- econometric models , Nigeria , Saving and investment - econometric models