An empirical investigation of the effect of corruption on domestic savings in Nigeria

Abstract

This study assesses the impact of corruption on Nigeria’s domestic savings. To this end, an ARDL technique was employed to analyze quarterly data for the 1996–2019 period. We find evidence of a long-term relationship between domestic savings and corruption (along with income growth, income level, inflation rate, deposit interest rate, unemployment rate including oil price). The empirical results indicate that lowering corruption level raises domestic savings over the long-term. Other important factors that drive domestic savings over the long-run in Nigeria are income level, deposit interest rate, inflation rate, unemployment rate as well as oil price. Having established the major factors that affect domestic savings, some recommendations are offered to encourage saving mobilization in Nigeria.