Financing Economic Growth and Development in Sub-Saharan Africa (1981–2021)

The aim of this paper is to explore the relationship between financing growth and development using panel data, Auto regressive distributed lag model (ARDL) analysis in 31 selected high income sub-Saharan African countries for the period of 40 years from 1981 to 2021. The sampled countries were based on their average GDP growth rate over the years under study. The study used ex post-facto and analytical research design. The Gross Domestic Per Capita Growth (GDPPCG) served as the dependent variable while Domestic Credit to Private Sector by Banks (DCPSB), Bank Liquidity Reserve to Bank Assets Ratio (BLR) and Gross Domestic Savings (GDS) were used as the independent variables. The inflation rate served as the control variable. Using the bound test proposed by Pesaran, Shin, and Smith in 2001 (and long & short run causality approaches), the long-run association was estimated. The ARDL model's findings show that financial development has a favorable and considerable influence on economic growth in sub-Saharan African high-income nations. The study suggests implementing a financial inclusion approach to increase financial institution accessibility to households, particularly the unbanked in rural areas.