Savings, Investment and Economic Growth in Nigeria

Abstract

This study investigated the effect of savings and investment on the economic growth of Nigeria. To achieve the objectives of this study, secondary data were obtained from the central bank of Nigerian statistical bulletin providing record of Nigerian saving, investment and Gross Domestic Product (GDP) over the period 1980-2014. The data gathered were analyzed using the ordinary least square method of analysis, the augmented Dickey Fuller Test, Granger Causality Test, Error Correction Model and the cointegration test were equally carried out to check the stationarity and the Granger causes directions of the variables and also to check the longrun  relationship between the variables of study. The result of the statistical/econometrics analysis revealed that there is a relationship between saving, investment and economic growth in Nigeria. Consequent on the above, the researcher recommended that; measures must be put in place to encourage savings from the public; effort should be made to increase the consumption of made in Nigeria goods, which includes the usage of raw material that can be sourced locally by Nigerian industries in order to increase foreign exchange earnings.

Keywords: Savings, Investment, Export, Foreign Exchange Earnings, Economic Growth.