Domestic Savings and Economic Growth in Nigeria (1981 to 2021)

The significance of domestic savings remains a prominent topic in Nigeria's academic discussions, particularly due to its ongoing inability to close the savings-investment gap. In this context, the study explored how domestic savings influence economic growth in Nigeria. Specifically, it analyzed the effects of household savings, private sector savings, and public sector savings on economic growth, utilizing the time series data from 1981 to 2021 using the Autoregressive Distributed Lag (ARDL) model. The study design used was ex-post facto. The variables were integrated of order one I(1) and zero I(0), according to the results of the Phillips-Perron and Augmented Dickey-Fuller (ADF) tests. The results showed that Nigeria's economic development is greatly influenced by family savings, business sector savings, and public sector savings. Based on these results, the study recommended several actions, including encouraging households to develop a savings culture, formulating policies to promote savings among firms for reinvestment into the economy, and establishing a government savings fund for emergencies. If implemented effectively, these measures could help bridge the savings-investment gap and enhance the country's economic growth.