POPULATION AGE COMPOSITION, SAVINGS, AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS
POPULATION AGE COMPOSITION, SAVINGS, AND ECONOMIC GROWTH IN NIGERIA: AN EMPIRICAL ANALYSIS

Summary/Abstract: This study examines the interrelationship among population age composition, savings, and economic growth in Nigeria from 1983 to 2022 using a Vector Autoregression (VAR) econometric model. The research explores how demographic shifts, particularly the dependency ratios (young and old) and labour force participation, influence savings behavior and economic performance. Findings reveal that Nigeria’s youthful dependency ratio is significantly high, resulting in lower household savings due to increased consumption needs. Additionally, while labour force participation has grown, under-utilization remains a challenge, limiting its contribution to economic expansion. The study confirms that high dependency rates negatively impact savings in the short run, which in turn affects capital accumulation and economic growth. However, strategic investments in education, vocational training, and job creation could help Nigeria harness its demographic dividend. The study recommends policies aimed at increasing workforce productivity, expanding financial inclusion, and implementing macroeconomic stability measures to enhance savings and investment. These findings provide valuable insights for policymakers seeking to optimize Nigeria’s demographic structure for sustainable economic growth.

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