Financial Development and Sectoral Growth In the West African Monetary Zone

This study adopts a panel estimation technique in evaluating the responsiveness of sectoral growth to financial development in the West African Monetary Zone (WAMZ). Financial development is disaggregated into bank development measured by ratio of credit to private sector to gross domestic product, while market development is measured as the quotient of market capitalization to economic growth, and insurance penetration is measured by aggregate premium over economic growth. The results arising from this study hold that financial development positively affects the growth of the agricultural, manufacturing and service sectors in the WAMZ. In line with the supply-leading hypothesis, it is recommended that the financial system development should be pursued to accentuate an all-inclusive growth of a growth-seeking region like WAMZ.