The Role of Macroeconomic Policies on Savings Mobilization in Nigeria

O Momoh Abdulazeez ,Jimah Abdulminiru

doi:10.7176/jesd/12-4-02

Abstract

This research work analyzed the roles of macroeconomic policies on savings mobilization in Nigeria (1985-2018) empirically. The secondary data were adopted and sourced from CBN. Ordinary Least Square and Cointegration were used to determine the role of the selected macroeconomic policies on savings mobilization in Nigeria. The aftereffect of the overall statistic showed that there is a positive and significant impact between the macroeconomic variables and domestic savings mobilization in Nigeria. But in particular, financial deepening appeared to have a greater impact on savings mobilization in Nigeria. Exchange rate and inflation uncovered a reverse relationship with domestic saving mobilization in Nigeria. The Augmented Dickey-Fuller (ADF) unit root tests and cointegration demonstrated that the variables are stationary and there exists a long-run relationship among the variables. The study hence recommended among others that efforts should be geared towards continuous and all-around fiscal and monetary policies that will sustain this development in the financial sector. Additionally, the government ought to guarantee that adequate macroeconomic policies will be set up to attract foreign investors, encourage export, and make Nigeria an export platform where export goods could be delivered, this will assist with strengthening Nigeria’s exchange rate incite domestic savings. Finally, appropriate measures ought to be placed into encouraging banks to open branches in rural areas to mop up deposits. The rural banking policies should be returned to adjusted and implemented in Nigeria. DOI: 10.7176/JESD/12-4-02 Publication date: February 28 th 2021

Highlights

TO THE STUDY Macroeconomic policies include taxes, government spending and borrowing, exchange rate determinants, and monetary and credit rules
This study provides policies as it relates to macroeconomic policies and saving mobilization in the Nigeria economy
The Durbin-Watson statistics of 1.6 which is approximately 2 shows the absence of autocorrelation in the model. It was found in this research work that financial deepening has a significant impact on savings mobilization in Nigeria, the number of bank branches and per capita income have an impact on savings mobilization due to nonwww.iiste.org significant

Summary

Introduction

TO THE STUDY Macroeconomic policies include taxes, government spending and borrowing, exchange rate determinants, and monetary and credit rules. The primary goal of effective macroeconomic policies is to reduce uncertainty and risk in economic decision-making. A stable macroeconomic environment enhances prospects for growth and improved living standards. Capital formation through savings mobilization is an important factor in economic growth. Countries that can accumulate a high level of capital tend to achieve faster rates of economic growth and development (Uremadu, 2003). Savings provide developing countries like Nigeria with the much-needed capital for investment which improves economic growth. Increase in savings leads to an increase in capital formation and production activities that will, in turn, lead to employment creation and reduce external borrowings of government

Methods

Findings

Conclusion