What Drives Private Saving in Nigeria
"This study discusses the trend in Nigerian saving behaviour and reviews policy options to increase domestic saving. It also examines the determinants of private saving in Nigeria during the 1970-2007 period. It makes an important contribution to literature by evaluating the magnitude and direction of the effects of the following key policy and non-policy variables on private saving: Income growth, interest rate, fiscal policy and financial development. The framework for analysis involves the estimation of a saving rate function derived from the life cycle hypothesis while recognizing the structural characteristics of a developing economy. The study employs the Error-Correction Modelling procedure which minimizes the possibility of estimating spurious relations, while retaining long-run information. The results of the analysis show that the saving rate rises with both the growth rate of disposable income and the real interest rate on bank deposits."