ECONOMIC AND DEMOGRAPHIC INFLUENCES ON SAVINGS IN NIGERIA’S EMERGING MARKET

Abstract

This study examined factors that determine savings in Nigeria. Secondary data were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin and Annual Report of Nigerian Bureau of statistics from 1990 – 2023.Total savings to Gross Domestic Product was modeled as the function of savings rate, real gross domestic product, public expenditure as percentage of capital expenditure to gross domestic product, economic openness as percentage of export import to gross domestic product, financial deepening as private sector credit to gross domestic product, inflation rate and exchange rate. The Ordinary Least Square properties of co-integration, Augmented Dickey Fuller Unit Root and Error correction model were used to examine the long and the short run relationship that exists among the variables. R2, F-statistics and T-statistics were used to determine the extent to which the independent variables affect the dependent variable. The study found that 74.1 and 64.8 percent variation in total savings were explained by variation in the variables as formulated, the model was statistically significant based on F statistic and probability while the Durbin Watson proved the absence of serial autocorrelation. It recommends that Policies, strategies and measures should be devising by the regulatory authorities to enhance the operational efficiency of the financial system through effective regulations to achieve set goals, Regulatory structure and framework of the financial system should be integrated with macroeconomic objectives such as savings mobilizations and that the regulatory bodies in the financial system should be well managed to avoid conflict of policies with other macroeconomic objectives such as saving mobilization.