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Financial Depth in the WAEMU; Benchmarking Against Frontier SSA Countries

Author

Listed:
  • Calixte Ahokpossi
  • Kareem Ismail
  • Sudipto Karmakar
  • Mesmin Koulet-Vickot

Abstract

Financial depth in Sub-Saharan Africa (SSA) has been uneven over the last two decades. The WAEMU countries are lagging behind other regions, particularly the High Growth Non-oil Exporters (HGNOEs) group. We use two complementary methodologies to compare the two groups of countries. In a panel of 16 countries over 1997–2009, we find that the financial gap between the two groups of countries can be explained by institutional factors. In a benchmarking exercise comparing the major economy in the WAEMU (Côte d’Ivoire) with the most structurally similar in the control group (Mozambique), we show that Côte d’Ivoire underperformed relative to Mozambique and to its estimated potential. We then identify policy and institutional asymmetries between the two countries that could explain the gap in performance.

Suggested Citation

  • Calixte Ahokpossi & Kareem Ismail & Sudipto Karmakar & Mesmin Koulet-Vickot, 2013. "Financial Depth in the WAEMU; Benchmarking Against Frontier SSA Countries," IMF Working Papers 13/161, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:13/161
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    References listed on IDEAS

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    1. Kangni Kpodar & Raju Jan Singh & Dhaneshwar Ghura, 2009. "Financial Deepening in the CFA Franc Zone: The Role of Institutions," Post-Print hal-00450079, HAL.
    2. Panicos Demetriades & David Fielding, 2012. "Information, Institutions, And Banking Sector Development In West Africa," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 739-753, July.
    3. Sandrine Kablan, 2010. "Banking Efficiency and Financial Development in Sub-Saharan Africa," IMF Working Papers 10/136, International Monetary Fund.
    4. Sandrine Kablan, 2009. "Banking Efficiency and Financial Development in Sub-Saharan Africa (SSA)," The African Finance Journal, Africagrowth Institute, vol. 11(2), pages 28-50.
    5. Boyd, John H. & Levine, Ross & Smith, Bruce D., 2001. "The impact of inflation on financial sector performance," Journal of Monetary Economics, Elsevier, vol. 47(2), pages 221-248, April.
    6. Amat Adarov & Robert Tchaidze, 2011. "Development of Financial Markets in Central Europe; the Case of the CE4 Countries," IMF Working Papers 11/101, International Monetary Fund.
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    Citations

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    Cited by:

    1. Azanaw Mengistu & Hector Perez-Saiz, 2018. "Financial Inclusion and Bank Competition in Sub-Saharan Africa," IMF Working Papers 18/256, International Monetary Fund.
    2. Adrian Alter & Boriana Yontcheva, 2015. "Financial Inclusion and Development in the CEMAC," IMF Working Papers 15/235, International Monetary Fund.
    3. Salem Hathroubi, 2019. "Inclusive Finance, Growth and Socio-Economic Development in Saudi Arabia: A Threshold Cointegration Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 44(2), pages 77-111, June.

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