Financial Depth in the WAEMU : Benchmarking Against Frontier SSA Countries

Author/Editor: Calixte Ahokpossi ; Kareem Ismail ; Sudipto Karmakar ; Mesmin Koulet-Vickot
Publication Date: July 03, 2013
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
Summary: 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.
Series: Working Paper No. 13/161
Subject(s): Financial sector | West African Economic and Monetary Union | Sub-Saharan Africa | Nonoil developing countries | Cross country analysis | Economic models

Publication Date: July 03, 2013
ISBN/ISSN: 9781484309391/1018-5941 Format: Paper
Stock No: WPIEA2013161 Pages: 23
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