Savings, Investment Still Low In Nigeria, Report Says
Despite the growth in the savings and investment products in Nigeria, the country still records low savings and investments, according to a research by FSDH.
The FSDH Research stated in its monthly economic and financial markets for the month of May that the ratio of Gross national savings to the gross Domestic Products in Nigeria was one of the lowest among some selected countries including Kenya, South Africa, India, Malaysia, China, United Kingdom, and USA.
It stated, “The ratio of total investment to GDP in Nigeria is the lowest among the selected countries. In addition, despite the impressive growth in the mutual fund in Nigeria in the last five years, the ratio of mutual fund assets to the GDP estimated at 0.5 per cent as of December 2018 is still very low.
“These numbers show that there are a lot of growth opportunities for saving and investment in Nigeria. This low savings in the financial system means low amount of money will be available for lending purposes and the available funds will command high interest rate.”
According to the report, low savings and investment also limited the ability of a country to create wealth and lift its people from poverty.
“It also means that government at all levels will have limited access to raise tax revenue to embark on development purposes while corporates will have limited access to capital to expand their businesses,” FSDH stated.
The report stated that some of the identified reasons for low savings and investment in Nigeria were high unemployment, weak purchasing power and inadequate knowledge of investment products that were available and how they worked for the benefit of investors.
“FSDH Research, therefore, dedicates this edition of our monthly report to discuss some investment products in the Nigerian financial market and how Nigerians can create wealth from them.
“The investment products include the Federal Government of Nigeria bond, FGN Savings Bond, Nigerian Treasury Bills, Commercial Papers, mutual funds, real estate investment trusts and stocks.”