Determinants of private domestic savings in Nigeria (1981- 2015).

Otiwu K.; Peter A Okere; Uzowuru L.N

doi:10.31686/ijier.vol6.iss2.938

Authors

Otiwu K.

Imo State University, Nigeria

Author
Peter A Okere

Imo State Polytechnic, Nigeria

Author
Uzowuru L.N

Federal Polytechnic Nekede, Imo State

Author

DOI:

https://doi.org/10.31686/ijier.vol6.iss2.938

Keywords:

Financial Deepening, Financial Inclusion And Savings

Abstract

This study empirically evaluates the determinants of private domestic savings in Nigeria (1981- 2015). Secondary data were sourced from CBN statistical bulletin and bureau of statistics. Hypotheses were formulated and tested using vector error correction model (VECM) and the test for stationarity proves that the variables are integrated in 1(1) order which implies that unit roots do not exist among the variables. There is also long-run equilibrium relationship between the variables and the result also confirms about 29 percent short-run adjustment speed from long-run disequilibrium. The coefficient of determination indicates that about 78 percent of the variations in private domestic savings are explained by changes in its determinants in Nigeria. The results show that per capita income and financial inclusion are major determinants of private domestic savings in Nigeria. The study therefore recommends that concerted and well articulated efforts should be made to make available and affordable credits to productive investments like small scale industries/businesses as they constitute an integral part of the growth and transformation process of an agro based economy like that of Nigeria this will induce employment, increase financial access and income of the various economic agents which will have a spillover effect on private savings. Secondly, since Per capita income and financial inclusion are the important factors that influence private savings in Nigeria, policy makers can promote growth of per capita income by improving productivity of workers and greater effort should be geared towards sustaining or improving on the financial inclusion strategies.

Author Biographies

Otiwu K., Imo State University, Nigeria

Banking and Finance Dept.
Peter A Okere, Imo State Polytechnic, Nigeria

BANKING AND FINANCE DEPARTMENT
Uzowuru L.N, Federal Polytechnic Nekede, Imo State

Banking and Finance Dept.

References

Adelakun, O. J. (2015) An Investigation of the Determinants of Savings and Investment in Nigeria. International Economics and Business ISSN 2377-2301, 2015, Vol. 1, No. 2
Adewuyi, Bankole, &Arawomo. (2007). What Determines Saving in the Economic Community of West African State (ECOWAS)? Journal of Monetary and Economic Integration, 71-72.
Antai, A. S, Ita J. J. &Anam, B. E.(2015) Estimation of the Short Run and Long Run Determinants of Domestic Savings Rate in Nigeria (1970-2008) International Journal of Innovative Research in Technology, Basic and Applied Sciences Volume 1, Number 1, July 2015.
Athukorala, P. (1998). “Interest rates, savings and investment: Evidence from India.” Oxford Development Studies, June.
Athukorala, Prema-Chandra, and KunalSen (2004). “The Determinants of Private Saving in India”, World Development, Vol. 32, No. 3, pp. 491-503.
Bosworth, B.P. (1993). Saving and Investment in a Global Economy. Washington, D.C.: Brookings Institution.
Carroll, Christopher, and David Weil (1994). “Saving and Growth: A Reinterpretation.” Carnegie-Rochester Conference Series on Public Policy 40:133-192.
Determinants of Private Saving in Nigeria”. A Paper presented at the African Economic Society (AES) Conference, Cape Town, South Africa
Duesenberry, J. (1949). Income, Savings and the Theory of Consumer Behavior. London: Harvard University Press.
Gobna, W.O. and Nurudeen, A. (2009).Long Run Determinants of Savings in Nigeria (1981-2007); Evidence from Time Series Data. The Nigerian Journal of Economics and Management Studies. 4(1): 87-106.
Imoughele, L. E&Ismaila, M (2014)An Econometric Analysis of the Determinants of Private Domestic Savings in Nigeria (1981 -2012) International Journal of Humanities and Social Science, Vol. 4 No. 5; March 2014
Karlan, D., &Morduch, J. (2010). Access to Finance: The Economics of Saving - Ideas & Evidence. Journal of Development Economics, 1-25.
Keynes J. M (1936): General Theory of Employment, Investment and Money. London Macmillan Company Ltd
Lewis Arthur. (1955). “Theory of Economic Growth”, London: Allen and Unwin
Loayza, Norman, Klaus Schmidt-Hebbel, and Luis Serven(2000). “What Drives Private saving Across the World?” Review of Economics and Statistics 82(2):165-181.
Macklinon R.I (1973): Money and Banking in Economic Development. Washington DC; the Brooking Institute.
Maddison, Angus (1992). “A Long-Run Perspective on saving.” Scandinavian Journal of Economics, 94(2): 181-196.
Malunond A. T. (2007). Determinants of Domestic Saving Performance in Egypt An Empirical Study. World Bank, African Develop ant locks:ors, 2007.
Mankiw, N. Gregory, David Romer, and David N. Weil (1992). “A Contribution to the Empirics of Economic Growth.” Quarterly Journal of Economics, 107(2): 407-437.
Mbuthia, A. N. (2011). Households’ saving decisions in Kenya. Kenyatta University Press, 1-173.
Modigliani, Franco (1970). “The Life-Cycle Hypothesis of Saving and Inter-country Differences in the saving Ratio.” In W.A Eltis, M.F.G. Scott, and J.N. Wolfe eds., Induction, Trade, and Growth: Essays in Honour of Sir Roy Harrod. Oxford: Clarendon Press.
Mohamed, S. A. (2007): “Saving Function in Sudan”. An Empirical Study (1990-2004)”, (in Arabic), Unpublished M.Sc. Dissertation, Department of Economics, Omdurman Islamic University, Omdurman, Sudan.
Mutasim A. A. &Omran A. Y.(2016) DETERMINANTS OF SAVING RATE INSUDAN: An Empirical Investigation (1990-2013), Khartoum University Journal of Management Studies School of Management Studies. Vol.10, Issue 1, 2016
Nkah O. (1997) “Introductory Macroeconomic for Higher Education” Onitsha, Levrene Publisher
Nnanna O.J; A. Englama and F.O. Odoko (2004). “Finance, Investment and Growth in Nigeria”, Abuja, Central Bank of Nigeria Bullion.
Nwachukwu, T. E. and Egwaikhide, F.O. (2007).An Error-Correction Model of the Determinants of Private Saving in Nigeria. A Paper presented at the African Economic Society (AES) Conference, Cape Town, South Africa.
ObadanM .I and Odusola A. F (2001) Savings, Investment and Growth Patterns in Developed and Developing Countries. National Centre for Economic Management and Administrative (NCEMA) Management, Monograph Series, No. 1.
Okere, P.A &Ndugbu M.O (2015) Macroeconomic Variables And Savings Mobilization In Nigeria, International Journal for Innovation Education and Research www.ijier.net Vol.3-1, 2015
Onwuasoeze, M.I &Kirori G.N(2016) Analyzing The Determinants Of Private Savings In Kenya Over The Period 1993-2013,European Journal of Business, Economics and Accountancy Vol. 4, No. 2, 2016 ISSN 2056-6018.
Shaw, E. (1973). “Financial Deepening in Economic Development.” Oxford: Oxford University Press.
Smith A. (1976): “An Enquiry into the Nature and Causes of Wealth of Nations” University of Glasgows
Thirlwall, A. P. ( 2002). “The mobilization of savings for growth and development in developing countries.” ICFAI Journal of Applied Economics. 1 (1): 7-30
Uremadu, S.O. (2007). Core Determinants of Financial Savings in Nigeria: An Empirical Analysis for National Monetary Policy Formulation. International Review of Business Research Papers. 3 (3):56-367
Victorious, M.O and Abiola, R.K. (2004). The impact of Interest Rate Savings Mobilisation in Nigeria (1970-2000): A co-integration approach. htt://www.indiajournalofeconomics.com/january2004.htm#5
Wafure, O.G. (2012). Financial Sector Reforms and Private Savings: Evidence from Nigeria (1970 – 2009).WEEJS International Journal of Arts and Combined Sciences, 3(1, 2):1-12.