Research Article

THE EFFECT OF INFLATION ON PURCHASING POWER AND SAVING CULTURE IN NIGERIA

Salami Suleiman1*, Makeri Simon Chamba1
1 Department of Accounting, Faculty of Management Sciences Ahmadu Bello University, Zaria, 810211, Nigeria
* Corresponding author: ssalami@abu.edu.ng
Published: Jun, 2026
DOI: 10.67894/bbr.2026.rzghgoll
Pages: 54-91
Views: 28
Downloads: 10

Abstract

Practical economic conditions in Nigeria over the past decade have been characterized by persistent inflationary pressures, rising living costs, and declining real household income, all of which have continued to weaken consumers’ ability to maintain stable consumption and savings patterns. These macroeconomic challenges have raised concerns about how inflation influences household financial behavior, particularly in terms of purchasing power and saving culture. This study examined the effect of inflation on purchasing power and saving culture in Nigeria over the period 2010 to 2024. Three specific objectives guided the investigation: to evaluate how inflation has affected the purchasing power of Nigerian consumers; to assess the impact of inflation on the savings culture of individuals and households; and to examine how inflation has influenced the household savings-purchasing ratio. An ex-post facto research design was adopted, and annual secondary data on the inflation rate, real GDP per capita, gross domestic savings as a percentage of GDP, and the savings-purchasing ratio were sourced from the Central Bank of Nigeria Statistical Bulletin, the National Bureau of Statistics, and the World Bank World Development Indicators. Ordinary Least Squares regression analysis was employed to estimate three separate models corresponding to each research hypothesis. Regression results showed that inflation has a significant negative effect on purchasing power, saving culture and household savings-purchasing ratio. The study concluded that persistent inflation systematically erodes household purchasing capacity and weakens saving culture in Nigeria. It recommended stronger monetary policy commitment to price stability, supply-side fiscal interventions, and inflation-indexed savings products to protect household financial welfare. 

Keywords

Inflation purchasing power saving culture savings-purchasing ratio

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How to Cite

Suleiman, S., & Chamba, M. S. (2026). THE EFFECT OF INFLATION ON PURCHASING POWER AND SAVING CULTURE IN NIGERIA. Bayero Business Review, 10(1), 54-91. https://doi.org/10.67894/bbr.2026.rzghgoll

S. Suleiman, and M. S. Chamba, "THE EFFECT OF INFLATION ON PURCHASING POWER AND SAVING CULTURE IN NIGERIA," Bayero Business Review, vol. 10, no. 1, pp. 54-91, June 2026. doi: 10.67894/bbr.2026.rzghgoll

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