Pr Diarra
Effects of financial inclusion on money velocity stability in the WAEMU
Article , 2025
The aim of this paper is to examine the effects of financial inclusion (FI) on money velocity stability in WAEMU. To do so, we used data from the eight (8)WAEMU countries covering the period 2007-2020. The results of our estimations using the Pooled Mean Group (PMG), two-stage least squares (2SLS) and Generalized moment method (GMM) estimators reveal that an improved FI is associated with a decline of money velocity in both the narrow (V1) and broad (V2) sense in theWAEMU, and does not compromise its stability. Also, in the short term, the coefficients associated with the effects of the different financial inclusion variables on the velocity of money show the expected negative sign, but are statistically insignificant. Furthermore, our results show that in the long term, income per capita has a positive and
significant effect on money velocity. While the nominal interest rate on loans and the nominal exchange rate have negative effects on money velocity in WAEMU. In this context, the monetary authorities of WAEMU can pursue their initiatives to foster FI, while emphasizing the use of formal financial services.
But these innovations must be governed by an appropriate regulatory framework to avoid any spillover effects or abuses.
significant effect on money velocity. While the nominal interest rate on loans and the nominal exchange rate have negative effects on money velocity in WAEMU. In this context, the monetary authorities of WAEMU can pursue their initiatives to foster FI, while emphasizing the use of formal financial services.
But these innovations must be governed by an appropriate regulatory framework to avoid any spillover effects or abuses.
Effects of Fiscal Policy on Financial Bank Intermediation Quality in WAEMU Countries
African developement Review , 2025
The study assesses the effects of fiscal policy on the financial bank quality intermediation in the WAEMU. To do so, the effects of the government securities ratio and the tax pressure rate on the NPL ratio are examined separately. The study uses panel data from WAEMU countries over the period 1990–2021 and ARDL modelling by the PMG estimator for basics estimates and the GM-FMOLS estimator for robustness. The public securities ratio improves the financial bank quality intermediation up to the maximum threshold of 47.5% of GDP. The tax pressure rate contributes to increasing the NPL ratio up to the maximum threshold of 17.06%. These results imply that a reform of banking regulation should encourage banks to hold a significant proportion of public securities, without crowding out the private sector. They also call on governments to implement measures to stimulate economic activity to absorb fiscal pressure. The study contributes to the literature and empirical effects of fiscal policy on the financial bank quality intermediation in the WAEMU while serving as a decision-making tool for governments and banking authorities in the management of NPLs in their lending activities and development.
Determinants of fiscal rules policy credibility in West African Economic and Monetary Union countries
South African Journal of Economics, 2024
More than a quarter century after implementing fiscal rules, and despite extensions of the convergence phase, West African Economic and Monetary Union (WAEMU) countries are still unable to comply with the fiscal rules established. In addition, these countries are facing multiple shocks, exerting pressure on public finances. Based on this context, this paper empirically investigates the drivers of fiscal rules policy credibility of seven WAEMU countries over the period 1994–2019. Using two measures of fiscal rules policy credibility and pooled mean group (PMG) econometric estimator of dynamic panel, we find that internal and external macroeconomic variables are the main determinants of fiscal rules policy credibility in WAEMU countries in the long run. The institutional and political variables have mitigated effects. Specifically, we find that debt accumulation, economic activity fluctuation (gross domestic product), fiscal space reduction, and international commodity price fluctuation harm fiscal rules policy credibility, meaning that these variables deviate the fiscal policy from its target value. Our results suggest that WAEMU governments should pay attention to global shocks to reduce their macroeconomic vulnerabilities and better manage their economic resilience. In addition, they should better manage debt by allocating it to productive sectors, or improve the quality of institutions by establishing a genuine democracy that improves decision-making and reduces deviant behaviour.
Assessing the convergence of economic institutions in ECOWAS countries
Mondes en développement, 2024
This paper analyzes the convergence of economic institutions in ECOWAS countries over the period 2005–2019. Using the Fraser Institute’s Index of Economic Freedom indicators and adopting the Phillips and Sul (2007, 2009) log (t) test method, we show that there is no absolute convergence but rather club convergence between countries. Countries must promote this convergence in order to guarantee the viability of this monetary zone under construction.
Effects of foreign direct investment on industrial development in Sub-Saharan Africa: the role of exchange rate misalignment
Economia e politica industriale, May 27, 2024
The aim of this article is to analyze the role of exchange rate misalignment in explaining the effects of foreign direct investment (FDI) on industrial development in Sub-Saharan Africa. To this end, the ARDL model was used to analyze the nature of exchange rate misalignment, before mobilizing spatial econometrics to examine its role in explaining the effects of FDI on industrial development. The estimates show that: (1) the exchange rate of SSA countries registers positive deviations (overvaluation) and negative deviations (undervaluation) of the exchange rate, and that these effects are more pronounced in countries with fixed exchange rate regimes; (2) FDI has positive effects on industrial development, but undervaluation amplifies these effects, while overvaluation attenuates them. The article recommends adopting exchange rate undervaluations and improving the business climate to encourage massive FDI inflows and job creation in the manufacturing sector.
Correction: Effect of exchange rate misalignments on foreign direct investment in Sub-saharan Africa
SN Business & Economics, May 29, 2024
In this article the affiliation details for authors Mahamadou Diarra 2 and Idrissa M. Ouedraogo 3 were incorrectly given as
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