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Economic Union, Finance and Growth: A Prognosis in West Africa

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  • Kizito Uyi Ehigiamusoe
  • Hooi Hooi Lean

Abstract

This paper compares the impact of financial development on economic growth in the Union Économique et Monetaire Ouest Africaine (UEMOA) and non‐UEMOA countries. It also examines the finance‐growth nexus before and after the formation of UEMOA, as well as the indirect effect of economic union on economic growth through the financial sector. The study reveals a significant difference in the finance‐growth nexus between UEMOA and non‐UEMOA countries. Specifically, financial development has a robust positive impact on growth in UEMOA countries, while the impact is tenuous in non‐UEMOA countries. However, we find no remarkable difference in the finance‐growth nexus before and after the formation of UEMOA. We also reveal that economic union has no robust indirect effect on economic growth via the financial sector. The economic implication is that UEMOA could have economic benefits, but financial development is not a channel through which it influences growth. Therefore, it is necessary to reposition the union so that it can enhance the impact of finance on growth.

Suggested Citation

  • Kizito Uyi Ehigiamusoe & Hooi Hooi Lean, 2019. "Economic Union, Finance and Growth: A Prognosis in West Africa," African Development Review, African Development Bank, vol. 31(4), pages 434-447, December.
    • Handle: RePEc:bla:afrdev:v:31:y:2019:i:4:p:434-447
    DOI: 10.1111/1467-8268.12402
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    Cited by:

    1. Amar Anwar & Ichiro Iwasaki, 2023. "The finance–growth nexus in the Middle East and Africa: A comparative meta‐analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4655-4683, October.
    2. Murat Cetin & Ilhan Ozturk & Sevgi Sumerli Sarigul & Muntasir Murshed & Emine Kilavuz, 2025. "Nexus between technological innovation and environmental pollution in selected OECD countries," Natural Resources Forum, Blackwell Publishing, vol. 49(1), pages 841-862, February.
    3. Kohnert, Dirk, 2023. "Will the UEMOA survive the rise of anti-French sentiment in West Africa?," MPRA Paper 118357, University Library of Munich, Germany.
    4. Olajide Oyadeyi, 2024. "Monetary Integration Across West Africa: Is the Region Ripe for a Monetary Union?," SAGE Open, , vol. 14(2), pages 21582440241, April.
    5. Kizito Uyi Ehigiamusoe & Suresh Ramakrishnan & Sikiru Jimoh Babalola & Mohamad Shaharudin Samsurijan & Siti Rahyla Rahmat, 2024. "Analysis of the Moderating Roles of Human and Physical Capital on the Impact of Foreign Aid on Economic Growth in Nigeria," SAGE Open, , vol. 14(1), pages 21582440241, March.
    6. Kohnert, Dirk, 2023. "L'UEMOA, survivra-t-elle à la montée du sentiment anti-français en Afrique de l'Ouest ? [Will the UEMOA survive the rise of anti-French sentiment in West Africa?]," MPRA Paper 118358, University Library of Munich, Germany.
    7. Kizito Uyi Ehigiamusoe & Vinitha Guptan & Suresh Narayanan, 2021. "Rethinking the impact of GDP on financial development: Evidence from heterogeneous panels," African Development Review, African Development Bank, vol. 33(1), pages 1-13, March.
    8. Kizito Uyi Ehigiamusoe, 2021. "The nexus between tourism, financial development, and economic growth: Evidence from African countries," African Development Review, African Development Bank, vol. 33(2), pages 382-396, June.

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