Book

Description

The major objectives of the research are to examine the impact of credit on economic growth. In addition, the research will determine the moderating effect of government intervention in ensuring economic growth. A secondary panel data was collected from World Development Indicators and worldwide governance indicators from the period of 2002 to 2020.In this study, Fixed and Random estimation methods were used. This study used annual time series data from 2002-to 2020 to test the Fixed and Random Effect models as well as the Hausman test for the best model between the aforementioned methods. In addition to comparing credit's conditional and unconditional effects (before and after the interaction term), the research also examined the impact of credit on the economy. This study shows that financial development correlates positively and significantly with economic growth in Africa, especially when the government is involved. Findings from this research also show that on average, the African financial market for the period under review suffered high deregulation, and government effectiveness in intervening in the financial sector is appalling but if improved, this could cause an improvement in the efficacy and effectiveness of financial development as an instrument for economic growth, especially in Africa. The government should also serve as a guide, a monitor, and regulator, and implement credit-supportive policies.