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Bullion

Keywords

Savings, National savings, Savings culture.

Abstract

In Nigeria's economic history, the strides of the last five years, which have been internationally acclaimed, are unprecedented. The many reforms that have engendered the current success have largely included those in the financial sector, particularly, the positive policy shifts in the domestic money market as first steps towards a more robust and enduring face-lift for the sector. Part of the expectations are that the improved enabling environment from the reforms would continue to make more investment funds readily available, as well as attract droves of foreign direct investment. The challenges that remain include the need to deliver on the remaining objectives, as well as build on and sustain the current achievements. This paper considers the operations of a national savings certificate as a panacea to the dearth of long term savings for long term investments, to justify the reforms and achieve accelerated economic growth. A case study of two countries, India and the United Kingdom will be the focus of this paper, to serve as lessons of experience for recommending appropriate logistics and policies in adopting the Nigerian version of the National Savings Certificate. The introduction of the National Savings Certificate in Nigeria is expected to serve three major purposes; namely, harness the idle funds in the informal sector/outside the banking system to complement liquidity management; serve as a sustainable process of long-term savings mobilization; and inculcate savings culture, particularly the low income earners and the un-banked. It is, therefore, of great regret that the scheme is yet to take off after the policy pronouncement and the inauguration of the Board of the National savings certificate in 2003. The study reveals that The introduction of the National Savings Certificate in Nigeria is expected to serve three major purposes; namely, harness the idle funds in the informal sector/outside the banking system to complement liquidity management; serve as a sustainable process of long-term savings mobilization; and inculcate savings culture, particularly the low income earners and the un-banked. It is, therefore, of great regret that the scheme is yet to take off after the policy pronouncement and the inauguration of the Board of the National savings certificate in 2003.

Author Bio

The author is the Director, Banking Operations Department of the Central Bank of Nigeria.

Publication Title

CBN Bullion

Issue

1

Volume

30

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