Impact of Savings and Investments on Economic Growth in Nigeria

The study examined the impact of savings and investments on economic growth in Nigeria using annual time series data from 1981 to 2024. The Autoregressive Distributed Lag (ARDL) model was employed to analyse both the short-run and long-run relationships among the variables. The findings indicated that savings positively and significantly affect economic growth in the long run. Investment exhibits a significant positive impact on economic growth. The monetary policy rate negatively affects economic growth, suggesting that expansionary monetary policies may increase economic growth. Exchange rate movements exhibit both positive and negative effects on economic growth, indicating that exchange rate fluctuations play a crucial role in shaping economic dynamics in Nigeria. The study concluded that savings and investments are key factors for economic growth. The study recommended that policymakers needed to implement strategies such as attractive interest rates that promote savings and investment to enhance macroeconomic stability in Nigeria. A balanced monetary policy approach should be adopted to support economic growth without inducing excessive inflationary pressures.