“This study discusses the trend in Nigerian saving behaviour and reviews policy options
to increase domestic saving. It also examines the determinants of private saving in Nigeria during the 1970-2007 period. It makes an important contribution to literature
by evaluating the magnitude and direction of the effects of the following key policy and
non-policy variables on private saving: Income growth, interest rate, fiscal policy and financial development. The framework for analysis involves the estimation of a saving
rate function derived from the life cycle hypothesis while recognizing the structural
characteristics of a developing economy. The study employs the Error-Correction Modelling procedure which minimizes the possibility of estimating spurious relations, while retaining long-run information. The results of the analysis show that the saving rate rises with both the growth rate of disposable income and the real interest rate on bank deposits.”