An Empirical Analysis of Financial Sector Development and Savings Mobilization in Nigeria: ECM Analysis
Ikubor Ofili Jude *
Department of Economics, Ambrose Alli University, Ekpoma, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
This study employs Error Correction Model (ECM) and Co-integration analysis to study the relationship between financial sector development and savings mobilization in Nigeria 1986 to 2017. As expected from a developing country like Nigeria, a short-run positive relationship is observed between the Nigerian stock market and crude oil prices and the direction is from crude oil prices to the Nigerian stock market but not the other way round. The short run, interest rate earning has a positive and significant impact on domestic savings while the other variables have no significant impact domestic savings in Nigeria. Government should therefore consolidate on past financial sector reforms to improve domestic saving mobilization to reduce the dependence of Nigeria on foreign savings to finance domestic investment.
Keywords: Savings, financial development, Co-integration ECM