Analyzing the Financial Development and Economic Growth in West Africa: With Specific Reference on Financial Economics

Abstract

The financial sector development in developing countries and emerging markets is part of the private sector development strategy to stimulate economic growth and poverty reduction. It could be defined that, the financial sector is the set of institutions, instruments, and markets. This study analyzes the financial development and economic growth in West Africa with the main focus on financial development. The data were obtained from the world bank open data page website to estimate the financial development using dynamic panel data approach. The results show that official development assistance and broad money statistically has a significant impact on financial development in West Africa. It is therefore imperative that policymakers should implement policies that may attract official development assistance and broad money through regional stability, infrastructural improvement and creditors right reinforcement. It is also important to introduce reforms in the financial sector which may lead to a wide range of financial development. The coefficient of the speed of adjustment is small that is, it indicates a slow impact on the adjustment.