The role of savings in the economic growth of Nigeria cannot be over-emphasised. However,
rapid population growth has posed a serious problem to savings mobilisation. A high dependency
ratio of the population will require substantial increase in future spending on health, education
and care for dependants. This envisaged decline in the working-age population could
lead to lower savings and investment rates and slower GDP growth. Against this background,
this paper examines the impact of dependency ratio on savings mobilisation in Nigeria
using a number of macroeconomic indicators that influence savings. Nigerian data on relevant
variables covering the period under investigation were utilised for the study. A multiple
regression approach that incorporated an error-correction model was used for our data analysis
and tests. The results suggested that savings ratio is determined by spread between lending
and savings deposit rates (SLS), domestic inflation rate, real interest rate and foreign private
investment (FPI). The major findings of this study are summarized as follows: (1) demographic
factors seem to have played a positive and insignificant role in explaining the savings
ratio in over two decades studied, (2) interest rates spread leads savings ratio, (3) domestic inflation
rate has a negative and significant impact on savings ratio, and (4) foreign capital inflows,
as measured by FPI positively and significantly affect savings ratio in Nigeria. The
findings of this research will guide policy makers on economic growth and poverty reduction
in countries of sub-Saharan Africa.