Journal of Economic, Finance Research and Review (JEFRR)

Savings, Investment and Economic Growth in Nigeria: Evidence from ARDL Bounds Testing and Granger Causality

Inam, Dr Uduakobong Samuel, Usoro, Irene Baldoma

20 July 2026 · Vol. 2, Issue 7, pp. 404-420

DOI: 10.65150/EP-jefrr/V2E7/2026-05

Abstract

The study examined the relationship between Savings, Investment and Economic Growth in Nigeria using time series data covering the period of 1990 to 2020. Specifically, the study examined: the effects of gross domestic savings on economic growth; and the effects of gross domestic investment on economic growth in Nigeria. It investigated the existence of a long run relationship between Savings, Investment and Economic Growth in Nigeria and as well examined the causal relationship between Savings, Investment and Economic Growth in Nigeria. The study employed Autoregressive Distributed Lag (ARDL) model. The ARDL long-run bounds test established the existence of long run effects of savings and investment on economic growth in Nigeria. The study revealed that savings has a positive and statistically significant relationship with economic growth in the short run and in the long run. On the contrary, investment has a negative and statistically significant relationship with economic growth in the short run and in the long run. The ECM result revealed that about 68.9% of the short run disequilibrium and inconsistencies are corrected and adjusted to long run equilibrium path. The Granger Causality test revealed no causal relationship between savings and economic growth as well as none between investment and economic growth. The study recommends that the government and policy makers should formulate and implement policies that will encourage savings and enhance the savings culture. Additionally, investment expenditures should be prioritized and strategically channeled to the real sector to boost output growth

Keywords: Savings, Investment, Economic growth, ARDL model, Co-integration, Error correction

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Inam, Dr Uduakobong Samuel, Usoro, & Irene Baldoma (2026). Savings, Investment and Economic Growth in Nigeria: Evidence from ARDL Bounds Testing and Granger Causality. Journal of Economic, Finance Research and Review, 2(7), 404-420. https://doi.org/10.65150/EP-jefrr/V2E7/2026-05

@article{Inam2026,
  title   = {Savings, Investment and Economic Growth in Nigeria: Evidence from ARDL Bounds Testing and Granger Causality},
  author  = {Inam and Dr Uduakobong Samuel and Usoro and Irene Baldoma},
  journal = {Journal of Economic, Finance Research and Review},
  year    = {2026},
  volume  = {2},
  number  = {7},
  pages   = {404-420},
  doi     = {10.65150/EP-jefrr/V2E7/2026-05},
  url     = {https://doi.org/10.65150/EP-jefrr/V2E7/2026-05}
}

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