IMF Ranks Nigeria 11th Country with Highest Private Savings in Africa

Ndubuisi Francis in Abuja

The International Monetary Fund (IMF) has ranked Nigeria as the 11th country with the highest private savings in sub-Saharan Africa (SSA) region, placing Angola on the number one spot.

The rating was contained in a new IMF working paper captioned “Private Savings and COVID-19 in Sub-Saharan Africa.”
According to the report, private savings in Nigeria increased from about 19 per cent in 2019 to about 24 per cent in 2022.

Savings, it noted, were the most important source of financing for Nigerian households’ survival during COVID-19, followed by loans, goodwill, and working.
The paper re-examined the main private savings determinants in Africa, followed by an analysis of the COVID-19 pandemic impact on private savings in the region and other country groupings. Using an unbalanced panel data from 1983−2021 for 31 SSA economies, the paper found that real per capita economic growth remains a key historical determinant of private savings in the region.

In contrast with other regions, private saving rates have not increased during COVID-19 in SSA.
The report stated: “Instead, COVID-19 deaths in our estimations are significantly associated with a decline in private savings in SSA. Robustness checks and a descriptive analysis of household surveys during the pandemic corroborate those results.”

Overall, the IMF stated that private saving rate in SSA increased during the last two decades to an average rate of 17.3 per cent in 2019 from 11.5 per cent in 1983.

Angola occupies the first slot, accounting for the largest private savings in SSA with about 55 per cent while Gabon and Congo came second and third with 42 per cent and 41 per cent respectively.

“Private saving rates, as expected, are particularly low in fragile states and low-income countries (LICs).
“The private saving rate in SSA has increased during the last two decades to an average rate of 17.3 per cent in 2019 from 11.5 per cent in 1983.
“However, there is significant heterogeneity across the SSA countries. Oil exporters and middle-income countries

“MICs (Middle Income Countries) are the highest savers in the region (Figure 2, Panel II). Private saving rates, as expected, are particularly low in fragile states and low-income countries (LICs),” the report stated.