Achieving sustainable economic growth in Sub-Saharan African countries using the tool of monetary policy effectiveness

The issue of achieving and sustaining a nation's economicgrowth is an issue that is of concern to many nations of the world,especially the sub-Saharan African (SSA) nations. This was in linewith the United Nations Sustainable Development Goal (SDG) 8 ofEconomic Growth. This study, therefore, ex...

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Bibliographic Details
Published in:Journal of Central Banking Theory and Practice (Podgorica) 2023-09, Vol.12 (3), p.111-132
Main Authors: Isibor, Areghan, Omankhanlen, Alex, Ehikioya, Benjamin, Osuma, Godswill, Oladipo, Adenike, Bunmi-Alo, Adedoyin, Ajalaadebowale, Kikiyanu
Format: Article
Language:English
Subjects:
Central banks
E52
E58
Economic activity
Economic growth
Exchange Rate
ExchangeRate
Foreign exchange rates
GDP
GDP Per Capita
Gross Domestic Product
Hypotheses
Inflation
Inflation rates
Interest rates
Macroeconomics
Monetary policy
Money supply
O10
Per capita
Price stabilization
Sub-Saharan Africa
Sustainable development
Sustainable Development Goal
Sustainable Economic Growth
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Summary:The issue of achieving and sustaining a nation's economicgrowth is an issue that is of concern to many nations of the world,especially the sub-Saharan African (SSA) nations. This was in linewith the United Nations Sustainable Development Goal (SDG) 8 ofEconomic Growth. This study, therefore, examines how monetarypolicy tools can help the SSA governments achieve the SDG 8 goaland also sustain it. Relevant secondary data on sustained economicgrowth (GDPPC) (dependent variable) and interest rate, exchangerate, money supply, and inflation rate (independent variable) weregathered from the annual report of the Central Banks of the 48 SSAnations. The panel data year covers the period from 2016 to 2022.The unit root test confirms the variables to have a level integrationorder. The Hausman test suggests the use of fixed effect regression.The fixed effect regression shows that for the 48 SSA nations, interestrate, inflation rate, and money supply were positively significant inimpacting GDPPC while exchange rate was negatively significant inimpacting GDPPC. The study, therefore, recommends that importpromotion, for example, should be avoided because it raises the ex-change rate and lowers the value of currencies of the SSA nations.
ISSN:2336-9205
1800-9581
2336-9205
DOI:10.2478/jcbtp-2023-0027