Inflation-targeting vs. non-inflation-targeting Regimes and Macroeconomic Performance in Africa: Evidence from econometrics approaches

Abstract This study uses panel VECM, VAR, and impulse response analysis to evaluate African economies with and without inflation-targeting frameworks. The findings suggest that inflation-targeting regimes provide stronger price and growth stability, whereas non-inflation-targeting economies confront chronic inflation, exchange rate instability, and fiscal dominance. In inflation-targeting economies, inflation shocks provide only temporary benefits, whereas in non-inflationary regimes, they exacerbate long-term instability. Overall, inflation targeting improves trust and resilience, but its efficacy is limited by structural flaws, particularly in exchange rate control. Policy options include increasing central bank independence, enhancing fiscal-monetary cooperation, and implementing progressive institutional reforms to support effective targeting regimes. JEL Classification E31; E52; E62; C33; O55