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This study investigated the determinants of bank savings in Nigeria as well as
examined the impact of bank savings and bank credits on Nigeria’s economic growth from 1970-
2006. We adopted two impact models; Distributed Lag-Error Correction Model (DL-ECM) and
Distributed Model. The empirical results showed a positive influence of values of GDP per capita
(PCY), Financial Deepening (FSD), Interest Rate Spread (IRS) and negative influence of Real Interest
Rate (RIR) and Inflation Rate (INFR) on the size of private domestic savings. Also a positive
relationship exists between the lagged values of total private savings, private sector credit, public
sector credit, interest rate spread, exchange rates and economic growth. We therefore recommend,
among others, that government’s effort should be geared towards improving per capita income by
reducing the unemployment rate in the country in a bid to accelerate growth through enhanced
savings.
