Consumption Dynamics in rural Nigeria: The Experience of Bayelsa State

Abstract

This study was conducted in rural Nigeria to establish the determinants of consumption among rural dwellers. Due to absence of national data on the subject, the survey method was adopted. Based on the reviewed literature and questionnaire, some variables were identified as determinants of consumption in rural Nigeria. Primary data were collected through structured questionnaire that was administered randomly to 5000 selected respondents from rural Bayelsa State, Nigeria. The data were analyzed and grouped into seven variables to test two hypotheses. The results showed that current income, expected future income, bank savings, investment in shares, pension fund returns and durable assets were significant determinasnts of consumption. We therefore suggest that government should reinforce financial inclusion so as enhance saving habit in rural Nigeria especially Bayelesa State. Drawing our inference from the life cycle hypothesis, the working population in rural Nigeria, need to invest their idle funds in equities and key into the new pension scheme in order to maintain a steady stream of income both now and in the future. Rural dweller should also be discouraged from increasing their consumption arbitrarily so that they can channel these excess consumption funds into savings or investment that would yield returns.

Keywords: Consumption, Rural dwellers, Clans, Atissa,  Epie, Bayelsa State