Your Nigerian Economist

Your Nigerian Economist

Inclusive growth lies at the heart of Nigeria's development. From macroeconomic policies to energy resources; trade to development topics, Your Nigerian Economist engages the citizenry in discussing relevant economic issues and proffers solutions towards a fairer, more developed economy.

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A Naira saved is worth two Naira earned

Mma Amara Ekeruche

Mma Amara Ekeruche

Amara works as a Research Associate at the Centre for the Study of the Economies of Africa (CSEA). She holds a BA (first class) in Economics from Kwame Nkrumah University of Science and Technology, Ghana and an MSc in Economic Policy from University College London.

“Anything that we can do to raise personal savings is very much in the interest of this country” – Alan Greenspan, former Chairman of the Federal Reserve in the United States.

Although Greenspan’s comment is true for all countries, it particularly applies to those in the early stages of development. A high saving rate, through investment, is a prerequisite for robust and sustained economic growth. Moreover, research strongly suggests that a bulk of this investment would have to be generated locally. 

Nowhere has the power of domestic saving been more apparent than in East Asia. Backed by sound financial institutions and liberal markets, the four East Asian Tigers harnessed national savings to offer adequate funds to investors. From a low saving rate of about 5 per cent in 1960, East Asians increased their savings, channelled it towards local investments and eventually began to invest in other countries. During the next two decades, the Tigers saved 35 per cent of their income on average, more than double the saving rate in the United States, which contributed to quadrupling their economy.

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