Financial development, human capital and economic growth nexus in Western and Central Africa: A comparative analysis

This thesis analysed the relationship among Economic Growth (GDP/Income), Financial Development (FD), and Human Capital (HC) for 20 Sub-Saharan African countries from 1970 to 2023 using the panel VARX approach. Results suggested, among others, that Trade (in all the zones); Health HC and Oil Prices (in Global and ECOWAS models); Health and Education HC (in ECOWAS and WAMZ); Money Supply (in FCFA zone and WAMZ); and GGE (General Government Expenditure), Education HC and General Price Level (in WAEMU); have positive impacts on income. Nevertheless, GGE (in FCFA zone), and both HC types (in BEAC and FCFA areas) effects on income are negative. FD (irrespective of the proxy used) is positively impacted by GDP (in FCFA and WAEMU zones); and negatively impacted by Health Human Capital (in FCFA and WAEMU zones). FD (proxied by DC (Domestic Credit)) is positively impacted by Income (Global, ECOWAS, FCFA, WAEMU, and WAMZ models); Education HC (in CEMAC, FCFA zones); Health HC (in ECOWAS) and Broad Money/BM (in CEMAC); and is negatively impacted by Education HC (in WAMZ); Health HC (in Global model) and BM (in WAEMU). As for economic and financial policies, the West and Central African monetary authorities, governents and policymakers in general, should stimulate economic growth by producing more goods and services for export, by facilitating access to domestic credit, by encouraging health and education investments by public as well as private sectors, and avoiding expansionary monetary policies. Contrariwise, specifically for WAEMU case, some inflation (like increasing money supply) may boost economic growth.