IDEAS home Printed from https://ideas.repec.org/a/icf/icfjmo/v10y2012i1p16-38.html
   My bibliography  Save this article

Savings, Investment and Economic Growth in Nigeria: An Empirical Analysis

Author

Listed:
  • Ben Obi
  • Gobna Obida Wafure
  • Auta Elisha Menson

Abstract

This paper empirically examines the relationship among savings, investment and growth rate using cointegration and Error Correction Model (ECM) approach. Specifically, savings and investment models are estimated. The series are integrated of order two, i.e., [I(2)]. Long-run relationship among variables is established using Johansen maximum likelihood methods. The econometric analysis shows that investment-GDP ratio lagged by one year, real growth rate of GDP lagged by one year, gross domestic savings lagged by one year and cost of capital lagged by two years are significant determinants of investment. Similarly, real growth rate of GDP, gross domestic investment-GDP ratio lagged by one year and economic liberalization are significant determinants of savings. A robust relationship among savings, investment and growth is identified. The study suggests that given the prevalence of low saving rate and invariably low investment rate, there is the need to adopt a proactive measure that will enhance savings and investment capacity in Nigeria, which in turn, will impact growth significantly. This can be achieved through a policy framework that will ensure an investor-friendly environment and develop human capacity and technology.

Suggested Citation

  • Ben Obi & Gobna Obida Wafure & Auta Elisha Menson, 2012. "Savings, Investment and Economic Growth in Nigeria: An Empirical Analysis," The IUP Journal of Monetary Economics, IUP Publications, vol. 0(1), pages 16-38, February.
  • Handle: RePEc:icf:icfjmo:v:10:y:2012:i:1:p:16-38
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gbenga Wilfred Akinola & Abieyuwa Ohonba, 2024. "The Effects of External Debt and Foreign Direct Investment on Economic Growth in Nigeria," Economies, MDPI, vol. 12(6), pages 1-23, June.
    2. Sallahuddin Hassan & Zalila Othman & Zalina Mohd Mohaideen, 2018. "The relationship between economic growth and employee provident fund: an empirical evidence from Malaysia," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(2), pages 229-242, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:icf:icfjmo:v:10:y:2012:i:1:p:16-38. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: G R K Murty (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.