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Savings and Trade Deficit in Nigeria

Filed in Current Projects, Economics Project Topic by on October 20, 2020

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Savings and Trade Deficit in Nigeria


According to Uremadu (2006), savings can be defined as “the amount left over when the cost of a person’s consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time”.

Saving, therefore, is the decision to defer consumption and to store this deferred consumption in some form of asset (Aghevli, et al., 2005).

Savings is described as a financial assets accumulated by the public- bothgovernment and private agents in the organized financial system (Tochukwuet al., 2008).

Saving naturally play an important role in the economic growth and development process. Savings determine the national capacity to invest and thus to produce, which in turn, affect economic growth potential.

Statement of the Problem

Savings and balance of trade is a macro-economic variable used to attain economic growth and development. If trade deficit result from importing goods or technology that make the economy more productive and stronger, then perhaps trade deficit aren’t so bad.

Second, this depends on what is causing what. It is well known that the large deficit of the1990s were the result of a massive inflow of capital from abroad. What causes this desire by foreigners to invest in Nigeria?

Surely a number of things but economist believe it was a combination of poor investment project abroad and the thriving market in Nigeria.


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Aghevli,Bujan, james.B, peter.M,  Dellano .V, and Geoffrey. W (1990). The role of  National saving in the World  Economy: Recent Trend and Prospects, IMfOccassional paper NO.4.

Akpan, Udoh and Aya(2011). “Precautionary Portfolio Behavior from a Life-Cycle Perspective.” Journal of Economic Dynamics and Control 21 (1997): 1511–1542.

Alexander,(2006). “Economic Status of the Elderly.”In Handbook of Aging and the Social Sciences.Edited by R. H. Binstock and L. K George. New York: Academic Press, 2001. Pages 352–368.

Ando.A. and Modigliani .f . (March1963). The Life-Cycle Hypothesis of savings: Aggregate Implication and Test, American Economics Review, (Vol, 53) No1, Part1.

Babatunde, Fakayode, Olorunsanya and Gentry (2007). “Determinant of Savings in Farm: the Nigerian Case.” Journal of Population Economics 5 (1992): 289–303.

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