Inefficiency and Gaps in Financial Stability in sub-Saharan Africa
Using the Stochastic Frontier Analysis on data for 33 sub-Saharan African countries over the period 2007 to 2018, we determine the drivers of the inefficiencies in financial stability and also estimate the existing financial stability gaps. The results confirm that credit to the private sector and t...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2022-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2022.2111056 |
| _version_ | 1811340496644079616 |
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| author | Evans Kulu William Gabriel Brafu-Insaidoo Eric Amoo Bondzie James Atta Peprah |
| author_facet | Evans Kulu William Gabriel Brafu-Insaidoo Eric Amoo Bondzie James Atta Peprah |
| author_sort | Evans Kulu |
| collection | DOAJ |
| description | Using the Stochastic Frontier Analysis on data for 33 sub-Saharan African countries over the period 2007 to 2018, we determine the drivers of the inefficiencies in financial stability and also estimate the existing financial stability gaps. The results confirm that credit to the private sector and the level of unemployment are significant drivers of financial stability in SSA, while employment, domestic savings, and regulatory quality significantly decrease the inefficiencies in financial stability. Further, it is revealed that government domestic debt arrears promote financial stability inefficiencies in SSA. Countries within the East Africa Community Countries (EAC) have the highest mean efficiency and the least financial stability gap for the period studied. It is therefore recommended that government borrowing from the domestic economy should be towards projects that have undergone proper appraisal as a means to reduce arrears accumulation. Employment is recommended to improve income while encouraging domestic savings as a conscious effort to enable the financial sector to perform its intended essential role in the economy |
| first_indexed | 2024-04-13T18:42:51Z |
| format | Article |
| id | doaj.art-a69897e26ebb41ff932bb720585a918c |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-04-13T18:42:51Z |
| publishDate | 2022-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-a69897e26ebb41ff932bb720585a918c2022-12-22T02:34:41ZengTaylor & Francis GroupCogent Economics & Finance2332-20392022-12-0110110.1080/23322039.2022.2111056Inefficiency and Gaps in Financial Stability in sub-Saharan AfricaEvans Kulu0William Gabriel Brafu-Insaidoo1Eric Amoo Bondzie2James Atta Peprah3Department of Industrial Mathematics, C.K. Tedam University of Technology and Applied Sciences, Navrongo, GhanaDepartment of Data Science and Economic Policy, School of Economics, University of Cape Coast, Cape Coast, GhanaDepartment of Economic Studies, University of Cape Coast, Cape Coast, GhanaDepartment of Applied Economics, University of Cape Coast, Cape Coast, GhanaUsing the Stochastic Frontier Analysis on data for 33 sub-Saharan African countries over the period 2007 to 2018, we determine the drivers of the inefficiencies in financial stability and also estimate the existing financial stability gaps. The results confirm that credit to the private sector and the level of unemployment are significant drivers of financial stability in SSA, while employment, domestic savings, and regulatory quality significantly decrease the inefficiencies in financial stability. Further, it is revealed that government domestic debt arrears promote financial stability inefficiencies in SSA. Countries within the East Africa Community Countries (EAC) have the highest mean efficiency and the least financial stability gap for the period studied. It is therefore recommended that government borrowing from the domestic economy should be towards projects that have undergone proper appraisal as a means to reduce arrears accumulation. Employment is recommended to improve income while encouraging domestic savings as a conscious effort to enable the financial sector to perform its intended essential role in the economyhttps://www.tandfonline.com/doi/10.1080/23322039.2022.2111056financial stabilitygovernment domestic debtgapstochastic frontier analysis |
| spellingShingle | Evans Kulu William Gabriel Brafu-Insaidoo Eric Amoo Bondzie James Atta Peprah Inefficiency and Gaps in Financial Stability in sub-Saharan Africa Cogent Economics & Finance financial stability government domestic debt gap stochastic frontier analysis |
| title | Inefficiency and Gaps in Financial Stability in sub-Saharan Africa |
| title_full | Inefficiency and Gaps in Financial Stability in sub-Saharan Africa |
| title_fullStr | Inefficiency and Gaps in Financial Stability in sub-Saharan Africa |
| title_full_unstemmed | Inefficiency and Gaps in Financial Stability in sub-Saharan Africa |
| title_short | Inefficiency and Gaps in Financial Stability in sub-Saharan Africa |
| title_sort | inefficiency and gaps in financial stability in sub saharan africa |
| topic | financial stability government domestic debt gap stochastic frontier analysis |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2022.2111056 |
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