Empirical Evidence on the Impact of the Banking Sector on the Sierra Leone Economy

The study seeks to assess the impacts of the banking sector on the Sierra Leone economy. The Case study research design was adopted for this study. The Pooled OLS regression Model, Correlation Matrix, and Descriptive Statistics were employed in the study. E-Views was used to analyze the panel data u...

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Bibliographic Details
Published in:Economic insights, trends and challenges trends and challenges, 2023, Vol.2023 (4), p.17-33
Main Authors: Bah, Abdullah, Squire, Andrew, Thomas, Edward
Format: Article
Language:English
Subjects:
Banking industry
Banks
Economic development
Economic growth
GDP
Gross Domestic Product
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Summary:The study seeks to assess the impacts of the banking sector on the Sierra Leone economy. The Case study research design was adopted for this study. The Pooled OLS regression Model, Correlation Matrix, and Descriptive Statistics were employed in the study. E-Views was used to analyze the panel data using the Pooled OLS regression data, Descriptive statistics, and the Correlation Matrix. The Pooled OLS econometric result shows that Bank Liquid Reserves to Assets positively correlates with Gross Domestic Product with a coefficient value of 0.8425. It was further revealed that the relationship is highly significant (p-value of 0.0158 and a t-stat of 2.4560. Domestic credit to the Private Sector has a negative relationship with the Gross Domestic Product with a coefficient value of (-0.155367). This relationship was further revealed to be highly insignificant (p-value of 0.7533 and t-stats of -0.3152). The result also shows that Deposit Interest Rates have a positive coefficient value of (2.1040), which is also highly significant (p-value of 0.0013 and t-stats of 3.3050). The study further revealed that the Gross Domestic Product (% of GDP) has a negative relationship with the GDP, with a coefficient value of (-0.2055). It further revealed that the result is highly insignificant (p-value of 0.1383 and t-stats of -1.4944). On the other hand, Interest rate spread has a negative relationship with the Gross Domestic Product with a coefficient value of (- 3.0265). It was further revealed that the relationship is highly significant (pvalue of 0.0000 and t-stats of -4.8611)
ISSN:2284-8576
2284-8584
DOI:10.51865/EITC.2023.04.02