Tools
Tools
Kamara, Morlai Saidu (2025) The Effect of Financial Intermediation on Economic Development in Sierra Leone (1980-2023). Masters thesis, Dublin, National College of Ireland.
Preview |
PDF (Master of Science)
Download (995kB) | Preview |
Abstract
Sierra Leone is confronted with a weak macroeconomic and financial sector growth couple with challenges such as the long civil war, lack of capital market and several external shocks which impede financial intermediaries to adequately facilitate the flow of funds between economic agents. Previous studies focus on linking financial intermediation and GDP growth, applied traditional unit root tests, focus on capital market and cross sectional data. However, this study is distinguished from earlier research by using GDP per capita as dependent variable, which gives better measure of economic wellbeing. Also, in addition to the traditional unit root tests, the Perron-Vogelsang structural break test is employed to account for stationarity during break points. Given that the country has no structured capital market, it is worthwhile to investigate financial intermediation under the circumstance of banks as the major players with a country specific study rather than cross sectional. Thus, the research examines the effect of financial intermediation on economic development in Sierra Leone and the causality between financial intermediation and economic development. The dynamic OLS, ARDL approach is used to estimate the model and the Granger Causality test was applied to affirm the causation between financial intermediation and economic development with time series data from 1980 to 2023 sourced from WDI database with Stata software package version 14.2 applied. The results revealed that DCPS has a negative impact but insignificant, whiles BM shows a positive effect on economic development in the short run but negative effect in the long run. The granger causality test shows a uni-directional result, which validates that DCPS granger causes economic development in Sierra Leone, but Economic development does not granger causes DCPS. There is no causality relationship between BM and economic development. The study recommends that GoSL to allocate resources to productive sectors and encourage private sector growth, to develop the capital market to facilitate bonds and equity transaction as supplement to long term financing, to improve the legal and regulatory framework for financial institutions, and reinforce contract agreements. GoSL to focus on capacity building programs for the youthful population, and roll out infrastructural projects. The BSL to implement prudent monetary stability policy in tandem with rationalize public spending. The study will encourage authority in Sierra Leone to deepen financial intermediation processes thereby foster economic development.
| Item Type: | Thesis (Masters) |
|---|---|
| Supervisors: | Name Email Chattopadhyay, Amit UNSPECIFIED |
| Subjects: | D History General and Old World > DT Africa H Social Sciences > HG Finance H Social Sciences > HC Economic History and Conditions > Development Economics |
| Divisions: | School of Business (- 2025) > Master of Science in Finance |
| Depositing User: | Ciara O'Brien |
| Date Deposited: | 23 Feb 2026 15:45 |
| Last Modified: | 23 Feb 2026 15:45 |
| URI: | https://norma.ncirl.ie/id/eprint/9156 |
Actions (login required)
 |
View Item |