Factors Influencing Domestic Savings in Nigeria (1981-2019)

The study examined factors influencing domestic savings in Nigeria within the period of 1981-2019. The main objective of the study was to investigate factors influencing domestic savings in Nigeria. The empirical analysis that was carried out to achieve the objectives mentioned above were; Unit root test, ARDL Test and ordinary least square (OLS), in which changes in Gross domestic savings (GDS) were regressed on Gross domestic product per capita (GDPPC), real interest rate (RINT) inflation rate (INFR) and real exchange rate (RER) using annual time series data from CBN statistical bulletin (2020). The result of unit root test showed that, there is mixed order of integration. This implies that some variables were stationary at level whereas others were stationary at first difference. The study showed that, there is significant relationship between Gross domestic product per capita (GDPPC) and Gross domestic savings (GDS) in Nigeria. The Durbin Watson result showed absence of autocorrelation while the speed of adjustment between short and long run disequilibrium is 96% annual. R-squared of 72% showed a good fit in the slope of the model employed. The result of model indicated that Gross domestic product per capita (GDPPC) has positive and significant impact on gross domestic savings, while real interest rate (RINT) inflation rate (INFR) and real exchange rate (RER) have negative and insignificant influence on gross domestic savings in Nigeria. The study concludes that Gross domestic product per capita (GDPPC) is significant to gross domestic savings in Nigeria within the period under review. Based on the findings above, the researcher recommends that: A better and stronger savings culture should be promoted and sustained. There should be strong and comprehensive legal framework that will continue to aid in monitoring the performance of savings of the deposit money banks in Nigeria..