Measuring Financial Development in Sub-Saharan Africa

Gelbard, Enrique; Leite, Sérgio Pereira

doi:10.5089/9781451852806.001

Cited by 54 publications

(43 citation statements)

References 13 publications

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“…These markets were still at an early stage of development in the mid-to late 1980s, though the financial systems of Kenya and Nigeria were two of the most diverse and dynamic to be found in sub-Saharan Africa. Gelbard and Leite (1999) derive an overall index of financial market development for countries of sub-Saharan Africa from a set of six sub-indices representing key characteristics of markets, and on this basis, conclude that financial market development in the ten study countries was "minimal" in 1987. Among the various sub-indices, the financial products index indicates that the study countries offered a very narrow selection of financial products.…”

Section: Financial Market Development In the Early Stagesmentioning

confidence: 99%

Banking in Sub-Saharan Africa: What Went Wrong?

Gall

Daumont²,

Leroux³

2004

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The purpose of this paper is to study the origins of banking crises in sub-Saharan Africa, drawing upon the experience of ten countries during the period 1985-95. It examines, in particular, which factors were the most important sources of these crises. The conclusions underscore that the banking crises examined did not represent an entirely special case-a number of factors identified in the general literature, including macroeconomic shocks, were highly relevant-but note that several of their features were nonetheless specific to this part of the world. These banking crises were the very prototype of endemic crises associated with heavy government intervention in the banking system. In this regard, the paper analyzes the complex role of the government in banking in sub-Saharan Africa, the many channels through which governments intervened, and the economic and institutional environment in which the banks operated. JEL Classification Numbers: E6, G18, G21

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Section: Financial Market Development In the Early Stagesmentioning

confidence: 99%

Banking in Sub-Saharan Africa: What Went Wrong?

Gall

Daumont²,

Leroux³

2004

IMF Working Papers

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“…1 For further discussion of financial development in Africa, see Ndikumana (2001), Gelbard and Leite (1999), Nissanke andAryeetey (1998), andMehran et al (1998).…”

Section: Underdeveloped Financial Systemsmentioning

confidence: 99%

Capital Flows, Capital Account Regimes, and Foreign Exchange Rate Regimes in Africa

Ndikumana

2003

SSRN Journal

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This study examines capital flows and shifts in capital account and exchange rate regimes in African countries over the past two decades. The evidence shows that official lending to Africa has declined while the volume of private capital flows remains low and significantly below the levels observed in other developing regions. Private capital inflows to Africa are limited due to several factors, including the weakness of the macroeconomic environment, underdeveloped financial systems, high country risk, and exchange rate misalignments. The focus of policy reforms must be on alleviating these constraints in order to attract more foreign capital and overcome the shortage of development financing.Many African countries have pursued reforms aimed at liberalizing their capital account and exchange rate regimes. However, liberalization has not been accompanied by systematic gains income growth, price stability, and trade performance. African countries must pay serious attention to the scope, speed, and sequencing of capital account liberalization to minimize potential adverse effects of openness. It is desirable for countries to maintain selective discretionary control over capital movements and exchange rate markets in order to hedge against adverse shocks to the economy and to maintain macroeconomic and financial stability. To attract foreign capital, any move toward capital account openness and exchange rate liberalization must be supported by reforms aimed at improving credibility of macroeconomic policy and establishing an investment-friendly environment. These reforms will not only attract foreign capital but also encourage domestic investment.An important aspect of capital movements in Africa is the high level of capital flight. There is an urgent need for policies to stem further hemorrage of capital from Africa and induce the repatriation of private capital held abroad. This will require not only improvement of the macroeconomic conditions to ameliorate incentives for domestic investment, but also reform of the political and legal systems to improve accountability and credibility of economic policy. JEL Classification: F21, F32; O55 1

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“…On account of the growing empirical evidences supporting the positive role of financial development on economic growth (Greenwood and Jovanovic, 1990;King and Levine, 1993b;Fry, 1995;Odedokun, 1996;Gelbard and Pereira, 1999;Ndikumana, 2000) and Levine et al (2000) the role of financial factors can be captured into a growth equation. Thus, by controlling for non-financial factors that influence long run growth 6 , we generalize the specification of a growth equation that accounts for the effects of financial development as follows: Equation (1) above is the growth equation to be estimated in this study using financial and control variables defined as follows:…”

Section: Model Specificationmentioning

confidence: 99%

“…In another development, Gelbard and Pereira (1999) consider six major aspects of financial development 5 in their survey of 38 Sub-Saharan African countries. By computing a composite index that measures the overall level of financial development for each of the six aspects of financial development, they found that Ghana, Kenya, Mauritius, Namibia, South Africa and Zambia have a largely developed financial system in 1997.…”

Section: Literature Reviewmentioning

confidence: 99%

Financial Deepening, Interest Rate Spread and Economic Growth: New Evidence from Sub-Sahara Africa

Jalloh¹,

Guevera²

2017

International Journal of Business, Economics and Management

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Article History KeywordsFinancial deepening interest rate spread, growth , efficiency, intermediation, Sub-Sahara Africa E44, G21, O40, O47, C23 This study examines the nexus between financial deepening, interest rate spread and economic growth using data from Sub-Sahara African (SSA) countries. A dynamic panel approach is employed in estimating the parameters of the specified equation using the Sargan test of over-identification restriction in assessing the validity of the instruments used in addressing potential endogeneity problems of the data. The results show that whilst financial deepening positively drives growth, interest rate spread adversely affect growth in countries studied. In terms of relative effects, the results indicate that enhancing financial deepening by10.0 percent induces economic growth on average by a margin of 4.2 percentage points. On the contrary, however, raising interest rate spread by 10.0 percent reduces growth on average by a margin of 3.6 percentage points in countries studied. Based on these findings, there is a strong need for the implementation of policies that promote financial deepening. In particular, there is a strong need for financial authorities supervising the activities of commercial banks to ensure low interest rate spreads with a view to promoting the efficiency of banks in effectively playing their financial intermediation role to boost economic growth for poverty reduction in SSA countries. JEL Classification

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Measuring Financial Development in Sub-Saharan Africa

Cited by 54 publications

References 13 publications

Banking in Sub-Saharan Africa: What Went Wrong?

Banking in Sub-Saharan Africa: What Went Wrong?

Capital Flows, Capital Account Regimes, and Foreign Exchange Rate Regimes in Africa

Financial Deepening, Interest Rate Spread and Economic Growth: New Evidence from Sub-Sahara Africa

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