Abstract This research investigates the role of financial development in mitigating the adverse effect of economic vulnerability on economic growth across African countries. Based on data from 42 African nations between 1990 and 2023, the study identifies three basic findings. Firstly, financial development is good for economic growth, largely due to the benefits of improved economic policies undertaken in the early 2000s. Second, economic vulnerability continues to exert a strong negative influence on growth. Third, the financial development–vulnerability interaction coefficient indicates a weak but positive influence on growth, suggesting that financial systems served a buffering role against adversity from both the external and internal environment. Overall, the results highlight the necessity for stronger financial institutions and markets to act as a buffer against adversity to bring about more resilient and sustainable growth in the continent.
Sadraoui et al. (Sun,) studied this question.