Financial Depth in the WAEMU: Benchmarking Against Frontier SSA Countries

Calixte Ahokpossi, Kareem Ismail, Sudipto Karmakar and Mesmin Koulet-Vickot

No 2013/161, IMF Working Papers from International Monetary Fund

Abstract: Financial depth in Sub-Saharan Africa (SSA) has been uneven over the last two decades. The WAEMU countries are lagging behind other regions, particularly the High Growth Non-oil Exporters (HGNOEs) group. We use two complementary methodologies to compare the two groups of countries. In a panel of 16 countries over 1997–2009, we find that the financial gap between the two groups of countries can be explained by institutional factors. In a benchmarking exercise comparing the major economy in the WAEMU (Côte d’Ivoire) with the most structurally similar in the control group (Mozambique), we show that Côte d’Ivoire underperformed relative to Mozambique and to its estimated potential. We then identify policy and institutional asymmetries between the two countries that could explain the gap in performance.

Keywords: WP; GDP; WAEMU; credit coverage; Financial development; Financial possibility frontier; Benchmarking; WAEMU region; contract enforcement; credit information collection; WAEMU control variable; Credit; Financial sector development; Infrastructure; Legal support in revenue administration; Bank credit; Sub-Saharan Africa; Global (search for similar items in EconPapers)
Pages: 23
Date: 2013-07-03
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Citations: View citations in EconPapers (3)

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