THE IMPACT OF NATIONAL SAVINGS ON ECONOMIC GROWTH IN NIGERIA (1981-2017)

ABSTRACT
The impact of national savings on economic growth has generated lots of empirical findings with different findings. National savings is generally believed to be positively related to economic growth. More specifically, it is heard that, appropriate savings diverse policies in certain situations can be used to stimulate growth and development. However, diverse opinions have continued to emerge on how national savings can affect economic activities. The main objective of this study, is to ascertain the impact of national savings on economic growth. Endogeneous growth model is employed for the study with emphases on how national savings, investment, government expenditure and government tax affect economic growth in Nigeria. The main objective of this research is to ascertain the nature of relationship between national savings and economic growth. Therefore, this study has empirically examined the impact of national savings on economic growth in Nigeria, using annual time series data for the period 1981-2017.The variables considered are real GDP, a proxy for economic growth, national savings, investment, government expenditure and government tax as independent variables. Augmented Dickey-Fuller (ADF) test was used for the unit root test and the variables were found to be stationary at first difference. Then Johansen (1988), technique was used to establish if the stationary variables are co integrated. In addition, ECM is employed to correct any form of disequilibrium in the short run. The result of stationarity and normality test reveals that the model is fairly well specified and could be used for policy analysis. The analysis was based on data extracted from Central Bank of Nigeria (CBN) statistical bulletin and World Development Indicators(WDI).The result of the analysis shows that investment and government tax were statistically significant while national savings and government expenditure were not statistically significant at 5%.The results reveals that there is, overall a positive relationship between national savings and economic growth. The study therefore suggests that the government should adopt policies capable.