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Financial Integration and Growth Outcomes in Africa: Experience of the Trade Blocs

Author

Listed:
  • Ibrahim A. Adekunle

    (Babcock University, Nigeria)

  • Abayomi T. Onanuga

    (Olabisi Onabanjo University, Ogun State, Nigeria)

  • Ibrahim A. Odusanya

    (Olabisi Onabanjo University, Ogun State, Nigeria)

Abstract

In this study, we examine the benefits of financial integrations in four of Africa regional trade blocs: COMESA, ECCAS, CEN-SAD and ECOWAS. We regress de-jure and de-facto indices of financial integration on growth outcome using the dynamic system generalised method of moment and pooled mean group estimation procedure. Findings revealed that total foreign asset and liabilities and foreign liabilities as a percentage of GDP are inversely related to growth outcomes in COMESA. In CEN-SAD, we found that foreign liabilities as a percentage of GDP hurts growth. In ECCAS, growth-financial integration relationship showed that foreign liabilities as a percentage of GDP inhibit real per capita GDP in the long run. In ECOWAS, foreign liabilities as a percentage of GDP is inversely related to real per capita GDP in the long run. Policy implications of our findings were discussed.

Suggested Citation

  • Ibrahim A. Adekunle & Abayomi T. Onanuga & Ibrahim A. Odusanya, 2021. "Financial Integration and Growth Outcomes in Africa: Experience of the Trade Blocs," Working Papers 21/052, European Xtramile Centre of African Studies (EXCAS).
  • Handle: RePEc:exs:wpaper:21/052
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    More about this item

    Keywords

    Financial Integration; Economic Growth; system GMM; Pooled Mean Group; Regional Trade Bloc; Africa;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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