Building Savings and Investments Culture among Nigerians

Abstract

Many Nigerians today live below the poverty line not necessarily because they have low incomes or poor salaries, but perhaps they lack savings and investments culture. The Harmonized Nigeria Living Standard Survey reports that Nigeria spends about N25 billion daily on food items. There is high propensity to consume but low propensity to save. This is quite alarming for a developing nation. High consumption would mean low savings, low investment, and low capital formation. If this persists, the Nigeria populace will be engulfed in poverty trap. It is therefore necessary to build among Nigerians savings and investments culture. A review of extant literature revealed that people save and invest for several reasons among which are to enhance the standard of living, take advantage of rare business opportunities, and meet unforeseen circumstances. Savings can be done through piggy, stokvel, thrift collection, credits unions, and banking system while investment is in the form of real asset, financial asset, and foreign exchange investment. Whatever form of investment one contemplates, it is very important to assess the risk-return trade off of such investment. Savings and investments guarantee your future. No matter how small is your income, you must learn to save to mobilize funds for investment. If the standard of living of Nigeria populace must be enhanced, there is therefore serious need for household savings and investment. Savings and investments must be our life style. We however in this study recommended the credit unions method of savings for Nigerians who belong to a field of membership.