International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

An Econometric Analysis of the Determinants of Private Domestic Savings in Nigeria (1981 -2012)
Imoughele, Lawrence Ehikioya; Ismaila, Mohammed

This paper empirically evaluates the determinant of private savings in Nigeria (1981- 2012). The study used cointegration and Error Correction Mechanism to determine the relationship between private savings and internal and external factors. The result was robust. Our results show that income per capital, inflation rate, term of trade and financial deepening are significant determinants of private savings in Nigeria. The study recommended that there is need for proper financial market development and government should retain tight monetary and fiscal policies in order to fight inflation in the Nigerian economy. Finally, Government expenditure should be tied to specific viable economic projects in the economy. All non-viable projects should not be sourced through deficit financing and adequate machinery should be put in place by all sectors of government to arrest corruption and penalize those perpetrate it. This will make fiscal policy to have positive and significant impact on private savings in Nigeria.

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