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Achieving Sustainable Economic Growth in Sub-Saharan African Countries Using the Tool of Monetary Policy Effectiveness

Author

Listed:
  • Areghan Isibor

    (Covenant University, Ota, Nigeria)

  • Alexander Omankhanlen

    (Covenant University, Ota, Nigeria)

  • Benjamin Ehikioya

    (Covenant University, Ota, Nigeria)

  • Godswill Osuma

    (Covenant University, Ota, Nigeria)

  • Adenike Oladipo

    (Covenant University, Ota, Nigeria)

  • Adedoyin Bunmi-Alo

    (Covenant University, Ota, Nigeria)

  • Kikiyanu Ajalaadebowale

    (Covenant University, Ota, Nigeria)

Abstract

The issue of achieving and sustaining a nation’s economic growth is an issue that is of concern to many nations of the world, especially the sub-Saharan African (SSA) nations. This was in line with the United Nations Sustainable Development Goal (SDG) 8 of Economic Growth. This study, therefore, examines how monetary policy tools can help the SSA governments achieve the SDG 8 goal and also sustain it. Relevant secondary data on sustained economic growth (GDPPC) (dependent variable) and interest rate, exchange rate, money supply, and inflation rate (independent variable) were gathered from the annual report of the Central Banks of the 48 SSA nations. The panel data year covers the period from 2016 to 2022. The unit root test confirms the variables to have a level integration order. The Hausman test suggests the use of fixed effect regression. The fixed effect regression shows that for the 48 SSA nations, interest rate, inflation rate, and money supply were positively significant in impacting GDPPC while exchange rate was negatively significant in impacting GDPPC. The study, therefore, recommends that import promotion, for example, should be avoided because it raises the exchange rate and lowers the value of currencies of the SSA nations.

Suggested Citation

  • Areghan Isibor & Alexander Omankhanlen & Benjamin Ehikioya & Godswill Osuma & Adenike Oladipo & Adedoyin Bunmi-Alo & Kikiyanu Ajalaadebowale, 2023. "Achieving Sustainable Economic Growth in Sub-Saharan African Countries Using the Tool of Monetary Policy Effectiveness," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 12(3), pages 111-132.
    • Handle: RePEc:cbk:journl:v:12:y:2023:i:3:p:111-132
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    More about this item

    Keywords

    Sustainable Development Goal; Sub-Saharan Africa; Sustainable Economic Growth; Inflation; GDP Per Capita; Exchange Rate.;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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