Monetary Policy Transmission Paths and Money Supply in Sub-Saharan Africa: Evidence from Nigeria and Ghana

Ugwuanyi Georgina Obinne (), Efanga Udeme Okon () and Okanya Ogochukwu Chinelo ()

International Journal of Business Management and Finance Research, 2021, vol. 4, issue 2, 55-74

Abstract: The main objective of this study gears towards evaluating monetary policy transmission paths and money supply in Sub- Saharan Africa: evidence from Nigeria and Ghana from1981- 2018. The Central Bank of Nigeria, Bank of Ghana and World Bank, World Development Indicator of 2018 furnished us with the data used for analysis. This study explored three different monetary policy transmission channels: interest rate, credit and asset pricing transmission channels and these variables were regressed on money supply in both countries using Auto Regressive Distributed Lag (ARDL) Model estimation technique. The study also employed other diagnostic tests such as: Normality, Auto correlation test, Heteroskedasticity test and Breusch-Godfrey Serial Correlation LM test and they confirmed the validity and reliability of the model employed. The inferential results revealed that credit to private sector transmission channels in both Nigeria and Ghana had positive and significant impact on money supply but lending rate transmission paths in the two countries impacted insignificantly on money supply. This study concludes that monetary policy transmission channels in Nigeria were more robust in impacting on money supply than in Ghana. As such, the study recommends that monetary authorities of both countries need to formulate stringent monetary policies that will reduce the circulation of money outside the financial systems and there should be a synergy between monetary and fiscal policies in both economies so as to aid the instruments of macroeconomic policies achieve their objectives.

Keywords: Monetary policies; Money supply; Transmission paths; Lending rate; Credit to private sector; Treasury bill rate. (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://academiainsight.com/index.php/ijbmfr/article/view/187/125 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ajo:ijbmfr:v:4:y:2021:i:2:p:55-74:id:187

Access Statistics for this article

More articles in International Journal of Business Management and Finance Research from Academia Publishing Group
Bibliographic data for series maintained by Lucía Aguado ().