Global Journal of Interdisciplinary Social Sciences

Abstract

Capital Accumulation, Savings and Economic Growth of a Nation – Evidence from Nigeria

Osundina K. C. and Osundina J.A

This study examines the problem of low savings and capital accumulation as it relates to economic growth in Nigeria. Addressing some of the methodological issues, underlying these macroeconomic aggregates, as well as identifying policy implications of the linkage between savings, capital accumulation and growth in Nigeria, The study covers a period of thirty-three years starting from 1980 to 2012. The study employed savings model, investment model and Growth model. Savings model shows that investment and gross domestic product have a positive and significant effect on savings in Nigeria while, inflation has a negative and insignificant effect on savings in Nigeria. Lending rate has a positive but insignificant effect on savings. Savings has a positive and significant effect on investment in Nigeria, investment has a positive but insignificant effect on economic growth while savings has a positive and significant effect on economic growth in Nigeria. It is recommended that, Particular attention should be paid to economic and sociocultural shocks specifically, the investment climate and policies must be put in place to curb inflation in Nigeria so as to ensure macroeconomic stability and economic development.