Achieving Sustainable Economic Growth in Sub-Saharan African Countries Using the Tool of Monetary Policy Effectiveness

Areghan Isibor (), Alexander Omankhanlen (), Benjamin Ehikioya (), Godswill Osuma, Adenike Oladipo (), Adedoyin Bunmi-Alo () and Kikiyanu Ajalaadebowale ()
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Areghan Isibor: Covenant University, Ota, Nigeria
Alexander Omankhanlen: Covenant University, Ota, Nigeria
Benjamin Ehikioya: Covenant University, Ota, Nigeria
Adenike Oladipo: Covenant University, Ota, Nigeria
Adedoyin Bunmi-Alo: Covenant University, Ota, Nigeria
Kikiyanu Ajalaadebowale: Covenant University, Ota, Nigeria

Journal of Central Banking Theory and Practice, 2023, vol. 12, issue 3, 111-132

Abstract: The issue of achieving and sustaining a nation’s economic growth is an issue that is of concern to many nations of the world, especially the sub-Saharan African (SSA) nations. This was in line with the United Nations Sustainable Development Goal (SDG) 8 of Economic Growth. This study, therefore, examines how monetary policy tools can help the SSA governments achieve the SDG 8 goal and also sustain it. Relevant secondary data on sustained economic growth (GDPPC) (dependent variable) and interest rate, exchange rate, money supply, and inflation rate (independent variable) were gathered from the annual report of the Central Banks of the 48 SSA nations. The panel data year covers the period from 2016 to 2022. The unit root test confirms the variables to have a level integration order. The Hausman test suggests the use of fixed effect regression. The fixed effect regression shows that for the 48 SSA nations, interest rate, inflation rate, and money supply were positively significant in impacting GDPPC while exchange rate was negatively significant in impacting GDPPC. The study, therefore, recommends that import promotion, for example, should be avoided because it raises the exchange rate and lowers the value of currencies of the SSA nations.

Keywords: Sustainable Development Goal; Sub-Saharan Africa; Sustainable Economic Growth; Inflation; GDP Per Capita; Exchange Rate. (search for similar items in EconPapers)
JEL-codes: E52 E58 O10 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:12:y:2023:i:3:p:111-132

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