1.1 BACKGROUND OF THE STUDY
1.2 STATEMENT OF PROBLEM
The economy suffered external shocks and vulnerability due to instability of oil price in the world market; the financial sector in response collapsed and some banks closed down leading to low savings and economic growth; exchange rate depreciated against US dollar, debt profile rose sharply, and national income decreases as well. Thus, it should be noted here that the slow rate of growth in developing countries today, are largely linked to low level of national savings, which has constrained its capacity to invest in the productive sectors of the economy due to low capital formation. The implication therefore, is that the low saving rate in the developing countries has resulted in lower rate of growth and development, as against the developed countries that accumulate higher savings and attained higher economic growth and development (Dhanya, 2015). It is against this backdrop, this study examines domestic savings and economic growth in Nigeria 1986-2017
1.3 AIMS OF THE STUDY
The major aim of the study is to examine domestic savings and economic growth in Nigeria 1986-2017. Other specific objectives of the study include;
1. To examine the components of domestic savings in Nigeria.
2. To examine the sources of savings in Nigeria.
3. To examine the impact of domestic savings on economic growth in Nigeria.
4. To examine the determinants of domestic savings in Nigeria.
5. To examine the relationship between domestic savings and economic growth in Nigeria.
6. To examine the macroeconomic determinants of economic growth.
1.4 RESEARCH QUESTIONS
1. What are the components of domestic savings in Nigeria?
2. What are the sources of savings in Nigeria?
3. What is the impact of domestic savings on economic growth in Nigeria?
4. What are the determinants of domestic savings in Nigeria?
5. What is the relationship between domestic savings and economic growth in Nigeria?
6. What are the macroeconomic determinants of economic growth?
1.5 RESEARCH HYPOTHESES
H0: There are is no significant impact of domestic savings on economic growth in Nigeria.
H1: There is a significant impact of domestic savings on economic growth in Nigeria.
H0: There is no significant relationship between domestic savings and economic growth in Nigeria.
H1: There is a significant relationship between domestic savings and economic growth in Nigeria.
1.5 SIGNIFICANCE OF THE STUDY
This study will be significant to policy makers to draw conclusion on where to strengthen the effort of investors. It will form a measuring tool to access the efforts of the financial sector as well as government agencies in managing polices that affect savings positive in recent years. It will also act as a source of information on various factors that can determine national savings. It will also help the students and researchers to do further work related to the research project in creating a fountain of knowledge. This study will extend the frontiers of the existing literature by emphasizing the roles of savings on economic growth.
1.6 SCOPE AND LIMITATION OF THE STUDY
The study is restricted to domestic savings and economic growth in Nigeria 1986-2017.
LIMITATION OF THE STUDY
Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)
Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.7 OPERATIONAL DEFINITION OF TERMS
Savings: according to Keynesian economics, are what a person has left over when the cost of his or her consumer expenditure is subtracted from the amount of disposable income earned in a given period of time. For those who are financially prudent, the amount of money left over after personal expenses have been met can be positive; for those who tend to rely on credit and loans to make ends meet, there is no money left for savings. Savings can be used to increase income through investing in different investment vehicles.
Economic growth: is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP.
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