Africa's monetary history is a tale of disruption-from the communal logic of cowries to the extractive brutality of colonial currency boards, and finally to the technocratic constraints of post-independence fiat systems. This paper asserts a provocative thesis: modern African central banks are vestiges of colonial frameworks, enforcing economic models that prioritise creditors over communities. Inflation targeting, debt conditionalities, and currency devaluations are not neutral policies-they are tools of monetary warfare against African sovereignty. We propose three radical shifts: developmental stability rooted in Africa's vast resource wealth, fiscal-monetary unity to break free from austerity's grip, and currency innovation embracing blockchain, digital credits, and energy-backed tokens. Metanomics-a novel framework blending indigenous wisdom with quantum finance-challenges the sterile dogmas of macroeconomic orthodoxy. We argue that money must reclaim its essence as real value-not speculative digits controlled by distant institutions, but dynamic energy exchanged in sovereign, regenerative systems. Africa's future lies not in compliance with international financial institutions, but in building decentralised, transparent, and resource-backed economies from the ground up. A monetary renaissance beckons if the continent dares to reclaim its past, confront its present, and forge a radically postcolonial financial future.
This paper empirically investigates the effect of cotton production and transmission channels of the international cotton price shocks on government revenues in Burkina Faso, a cotton-exporting country. Using the Structural Vector Autoregression (SVAR) model on data from 1985 to 2022, we find that positive shock in the world cotton price is associated with increased government revenues and economic growth. By investigating transmission channels, we have highlighted the exchange rate, prices paid to producers and export revenues as the most relevant channels for transmitting world cotton price shocks to government revenues. Our findings suggest that to increase its revenues, the Burkinab & egrave; government should support cotton production through price-based production incentive policies and encourage the private sector to invest in industrial processing and exports. In addition, it could establish a stabilisation fund and a specific tax system for the cotton industry based on export revenues in collaboration with the cotton companies.
The modern economy, characterised by increasing connectivity, and rapid digitalisation is transitioning towards a fast-evolving, data-driven driven digital landscape. This pervasive digital revolution has permeated nearly every sector, reshaping the labour market and business practices, while intensifying concerns about jobless growth and employment displacement. This study explores the dynamic relationship between digitalisation, employment, and other labour dynamics contributing to the ongoing global discourse on digitalisation's impact. Utilising comprehensive panel data for 39 African countries from 1990-2023, the study employs robust econometric approaches, including the Panel Vector Autoregressive (P-VAR) model, the Dumitrescu-Hurlin (DH) causality test, and the forecast error variance decomposition (FEVD), complemented by the Impulse Response Function (IRF), and constructs a Digitalisation Index (DIGIX) using the Principal Component Analysis (PCA). The empirical results reveal a positive, unidirectional relationship between digitalisation and employment and the total labour force. Further analysis indicates bidirectional causal feedback between digitalisation and both human capital and economic growth. Overall, the findings suggest that digitalisation positively impacts employment creation in Africa by fostering new industries and sectors and by supporting existing employment generation tools and systems. The results also identify economic growth, physical capital, and human capital as the key determinants that influence employment levels in Africa. The study highlights that while digitalisation offers significant potential, its full impact is currently constrained by issues such as digital inequality and socio-economic disparities. These insights underscore the necessity for targeted policies to leverage digitalisation for inclusive labour market development across the continent.
This study examines the key determinants of Bitcoin's price dynamics and its volatility contagion with major financial assets, including Brent oil, gold, USDX (US Dollar Index), EURO-USD, DJIA, and Nikkei-225, using advanced econometric techniques. By employing Wavelet Coherence and multivariate DCC-GARCH models on daily data from January 2010 to October 2022, we uncover critical insights into Bitcoin's interconnectedness with traditional markets. Our Wavelet Coherence analysis reveals that Bitcoin exhibits a leading relationship with Brent crude oil, particularly during crisis periods, while displaying negative correlations with gold, challenging its status as a consistent safe-haven asset. Strong comovements are observed between Bitcoin and currency index pairs (USDX and EURO-USD), whereas Bitcoin and DJIA exhibit an inverse relationship, suggesting diversification potential. The DCC-GARCH results further identify distinct volatility transmission mechanisms: while no short-term spillovers exist between Bitcoin and Brent oil, long-term volatility persistence is significant. Gold confirms its role as a stable hedge, showing minimal volatility clustering. Meanwhile, USDX, EURO-USD, and DJIA exhibit long-term volatility persistence, with Nikkei-225 also demonstrating prolonged volatility effects. These findings provide practical guidance for investors in constructing resilient portfolios by understanding Bitcoin's volatility linkages with traditional assets. This study not only advances empirical knowledge of cryptocurrency markets but also offers actionable insights for risk management and strategic investment decisions.
Financial capability and asset-building interventions have long been overlooked as a mechanism for improving employability and employment outcomes. Previous research has established a positive link between participation by young work seekers in youth employment programmes (YEPs) and employment outcomes post-training. These programmes include soft skills training, job matching, and/or financial capability. Little is known about the mechanisms by which financial capability interventions achieve this effect. This article investigates this question through mediation analyses of a longitudinal sample of young work seekers in YEPs from disadvantaged backgrounds. It finds that financial capability training combined with a stipend significantly improves the odds of employment, primarily through strong direct effects that are not fully captured by our mediation analyses. However, pathways are heterogeneous and time-dependent. For the most food-insecure participants, there is a clear mediation pathway: cash and financial literacy increase reported active saving practices, which in turn significantly improve employment. Conversely, for the same group, achieving basic economic stability was negatively associated with employment, suggesting cash may reduce pressure to accept precarious employment. But these positive effects dissipate up to two years after exiting training, at which point only job matching and having been trained in a metropolitan area predict employment. More research is required to understand how financial capability and cash improve employment odds for young people. Regardless, there is strong evidence to suggest that they are effective, at least in the short term, and that multi-component labour market and social protection interventions are needed that combine training and financial capability with focused efforts to address the structural challenges young work seekers face.
This paper examines the complex relationship between geopolitical risk events and cryptocurrency market volatility using high-frequency transaction data from 2018 to 2024, with particular focus on implications for emerging economies including African financial markets. We develop a novel artificial intelligence framework that integrates natural language processing of geopolitical news with high-frequency trading interval analysis to predict cross-market spillover effects. Our model identifies structural changes in cryptocurrency fund flows following major geopolitical events and quantifies the sensitivity of different cryptocurrency classes (traditional, green, and stablecoins) to these shocks. Using a comprehensive dataset of 1.2 billion transactions across 15 major cryptocurrencies and a geopolitical event database of 327 significant incidents, we demonstrate that our AI-enhanced approach outperforms traditional econometric models in capturing non-linear risk transmission dynamics. The model achieves a 55.8% improvement in predictive accuracy over standard GARCH models during periods of heightened geopolitical tension. Furthermore, we find asymmetric responses across cryptocurrency categories, with stablecoins exhibiting increased resilience through significantly lower volatility increases (22.3%) compared to traditional cryptocurrencies (89.4%) during geopolitical shocks. These findings have important implications for hedging strategies, portfolio diversification, and financial stability in increasingly interconnected global markets, particularly for emerging economies where cryptocurrency adoption is rapidly expanding and regulatory frameworks are still evolving.
Considering the multifaceted complexity of systemic risk and lack of predictive power of the current Financial Soundness Indicators, the authors intend to develop a new banking sector fragility index as an early warning signal for systemic risks; but also examine how climate shocks and exchange rate pressures affect the fragility of the banking sector. Furthermore, we propose the Climate Augmented Currency and Banking Crisis (CACB) model which is an extension of the second and third generation-type speculative attack model. The Augmented Autoregressive Distributed Lag (A-ARDL) is applied on monthly data from 2007M1-2023M12 in The Gambia. The analysis reveals that temporary climate shocks increase banking sector vulnerability in the long run. On the other hand, long term climate shock decreases banking sector fragility both in the short and long run. Likewise, a surge in exchange rate market pressure decreases banking sector vulnerability both in the short and long run. However, exchange volatility and exchange rate overvaluations increase the potential of a systemic risk in the banking sector. The CACB analysis identified four determinants of currency crisis: fragile banking sector, low level of international reserves, climate shock and state-contingent exchange rate overvaluation.
The capacity of inflation targeting (IT) policy to consolidate gains from financial liberalization in developing countries has been questioned, particularly after real interest rates have been driven to a negative territory following COVID-19's inflationary pressures. In this study, we examine the role of Bank of Ghana's IT policy in moderating the real interest rate-saving nexus analysed through the lens of the McKinnon-Shaw Hypothesis (MSH), which posits that maintaining real interest rates in a reasonable positive range would stimulate saving and investment rates in developing countries. We apply linear autoregressive distributed lag (ARDL) model to time series data spanning 1986-2023, augmented by non-linear ARDL analysis. Results show that IT policy strengthens the positive impact of real deposit interest rate on financial saving in the long run. The study, however, finds no stable long-run relationship between real interest rate and financial saving as there prevails only a short run nexus, suggesting that the MSH might be delayed than implied by theory. Further analysis reveals that the saving-real interest rate relationship is characterised by asymmetry in the short run, with saving responding more strongly to negative than positive levels of real deposit interest rate. The study's findings highlight the importance of maintaining strong commitment to low and stable inflation for successful financial liberalization. The findings again suggest that the central bank of Ghana should be mindful of the asymmetric effects of real interest rates when adjusting the policy rate in response to shocks.
This paper separately assesses the impact of the franc CFA's fixed parity with the euro on the real GDP per capita of the WAEMU and CAEMC economic and monetary areas. Using data collected from eight and six countries respectively, and over the period 1989-2019, we use counterfactual estimation methods to estimate the average treatment effect of the currency peg on GDP per capita in two economic zones. This involves estimating the average treatment effect on the treated by directly imputing counterfactual outcomes for treated observations. Our results reveal contrasting average effects in the two zones. Compared to the counterfactual outcome, our results show contrasting effects of the reform on income in the two zones. While the reform significantly increased GDP per capita in the CAEMC zone, it had no effect on GDP per capita in the WAEMU zone compared to what would have happened otherwise. Analyzing the effects of this reform on income in terms of time trajectories also highlights converging situations between the two zones. In the long term, the average impact of reforms tends to be negatively reinforced.
In this rapidly evolving cryptocurrency market, traditional financial metrics often inadequately capture the distinct characteristics and high volatility inherent to these digital assets. This paper proposes a novel Cryptocurrency Performance Metric (CPM) designed to address these limitations by providing a nuanced assessment of cryptocurrency performance through a rolling-time analysis. The CPM integrates advanced metrics like range, returns, volatility, volume traded, and close prices that account for the extreme volatility, market behaviour, and technological factors affecting cryptocurrencies. Utilizing a comprehensive approach that includes price ratios, volatility measures, and market dominance indicators, the CPM offers a robust framework for evaluating the relative performance of various cryptocurrencies. The Cryptocurrency Performance Metric's methodology is grounded in financial theory and econometric models, enabling detailed outcomes that reflect both short-term fluctuations and long-term trends. The CPM offers investors, policymakers, and financial professionals a structured framework for evaluating cryptocurrency performance, enhancing investment strategies, and mitigating market risks. It also enables these parties to identify strengths and weaknesses among cryptocurrencies more effectively. By advancing the understanding of cryptocurrency dynamics, the CPM contributes to the development of more effective strategies for investment and risk management in this burgeoning asset class. Through this analysis it was found that Litecoin featured better than many other coins, Ethereum and Bitcoin remained major players, while Cardano was seen robust during 2023, 2024.
This study examines the impact of capital structure on firm performance using a large sample of 17,284 non-financial Indian firms spanning the period from 2009 to 2023. Drawing on trade-off, agency, and pecking-order frameworks, we apply static (OLS, FE/RE) and dynamic (system GMM) panel regressions to address firm heterogeneity, persistence, and endogeneity. Performance is measured by Return on Assets (ROA), Return on Equity (ROE), and Tobin's Q; leverage is captured via the debt-to-equity ratio. Our empirical findings reveal a statistically significant inverted U-shaped relationship: moderate leverage enhances performance through tax shields and managerial discipline, whereas excessive borrowing erodes value through distress and agency costs. System GMM results confirm robustness to endogeneity and lagged dependence. These results align with recent evidence from emerging markets that emphasise institutional constraints, information asymmetry, and governance quality as moderators of the financing-performance link (Nguyen et al., 2025; Ahmed, 2023). By providing context-specific and methodologically rigorous evidence from India-an economy undergoing structural financial reforms-this study extends capital-structure theory beyond developed-market settings and identifies an optimal leverage threshold relevant for practice. Implications span corporate financing policy, investor risk assessment, and regulatory frameworks in emerging economies.
Universities play a pivotal role in driving national economic development and advancing both global and national educational objectives. Ensuring financial sustainability in public universities is critical for achieving these goals. Existing research highlights the importance of revenue diversification and cost management strategies in fostering financial sustainability. However, the moderating role of executive officers' perceptions in influencing these relationships remains underexplored in the literature. This study addresses this gap by employing PLS-SEM to analyze primary data from public universities in an emerging economy context. Specifically, it investigates how executive officers' perceptions influence the effectiveness of revenue diversification and cost management strategies on the financial sustainability of public universities in Ghana. The findings reveal three key insights: First, revenue diversification and cost management strategies directly and positively impact financial sustainability in Ghanaian public universities. Second, executive officers' perceptions significantly and positively moderate the relationship between revenue diversification strategies and financial sustainability. Third, executive officers' perceptions exhibit a significant negative moderating effect on the relationship between cost management strategies and financial sustainability. The study highlights the important influence of leadership perceptions on financial results, indicating that executive officers should take an active role in shaping and executing policies for public universities.
Understanding how public debt affects private sector financing is important because it can either limit or boost private investment. This relationship is key for sustainable economic growth, helping policymakers balance public spending and private sector involvement. This study therefore, examines the impact of public debt on private-sector financing in Tanzania from 1990 to 2023. The results based on two specifications were estimated using the Autoregressive Distributed Lag (ARDL) approach. The estimated results indicate there is a strong inverted-U relationship between public debt and private sector financing in Tanzania over the long run period. Therefore, the result supports the hypothesis that public debt contributes positively to private sector credit up to 62.5% of GDP. Beyond that, public debt limits the credit available to the private sector. Therefore, it is essential for the government to maintain public debt at manageable levels. This approach will create room for countercyclical fiscal policies and support the achievement of development objectives by funding productive investments. Consequently, it is crucial for the government of Tanzania to adhere to borrowing limits, as this will enhance access to financing for the private sector.
With the migration to inflation targeting, many central banks embarked on a path of communication, in addition to setting an explicit inflation target. This paper relies on the South Africa Reserve Bank's (SARB) communication instruments and the key monetary policy (repo) rate to establish a relationship between SARB's signalling and the path of future rate actions. We examine the SARB's monetary policy committee statements from 2000 to 2023 to come up with indices of clarity, subjectivity and polarity. Empirical results from the multivariable Granger causality tests confirm a unidirectional Granger causality from Flesch-Kincaid (clarity indicator) to the repo rate which implies cointegration between the two. The impulse response analysis shows that a shock from the clarity and polarity indicators has a significant impact on the repo rate.
Exchange rate regimes have witnessed increasing attention over the past century due to their crucial role in maintaining macroeconomic stability, controlling inflation, and stabilizing exchange rates. This paper seeks to address an empirical gap in understanding exchange rate pass-through (ERPT) in emerging markets and provide evidence-based recommendations for monetary policy in three economies. The study examines the dynamics of ERPT in three North African countries-Tunisia, Morocco, and Jordan-over the period from 2006 to 2020. It employs a Vector Autoregressive (VAR) model and a Vector Error Correction Model (VECM) to analyze these relationships. Additionally, the Granger causality test is used to identify the direction of causality among the variables. This study finds that ERPT to inflation is low and incomplete in Morocco, Tunisia, and Jordan, suggesting that these economies can adopt more flexible exchange rate regimes without triggering significant inflationary pressures. The research contributes to the literature by highlighting the role of subsidies, import structures, and fiscal policy in shaping ERPT dynamics, while offering policy insights on inflation targeting, debt management, and subsidy reform in emerging markets.
Macroeconomic uncertainty poses significant challenges for policymakers, especially in the context of designing effective monetary policy. Despite extensive research on the effects of macroeconomic uncertainty on economic outcomes, the specific thresholds at which macroeconomic uncertainty influences policy decisions remain underexplored. This study addresses this gap by examining the threshold effects of macroeconomic uncertainty proxied with economic policy uncertainty on monetary policy in G7 countries. Using quarterly data from 2000 to 2024 and employing the Structural Vector Autoregression (SVAR) model, we uncover a distinct uncertainty threshold that divides the sample into two regimes: low-macroeconomic uncertainty and high-macroeconomic uncertainty periods. Our results reveal that policymakers face a critical dilemma during high-macroeconomic uncertainty periods, where the effects of macroeconomic uncertainty shocks on key macroeconomic variables are significantly amplified. By identifying and quantifying these threshold effects, we contribute new insights into how macroeconomic uncertainty alters the effectiveness of monetary policy. This study further emphasizes the importance of adaptive and responsive policy frameworks, particularly when financial markets are unstable. These results are crucial for policymakers and researchers aiming to better understand and navigate the complex dynamics of macroeconomic uncertainty in monetary policy formulation.
This study examines the convergence of digital transformation and the knowledge economy in Sub-Saharan Africa (SSA), revealing how these forces are increasingly shaping economic development in the region. Drawing on a bibliometric analysis of 204 peer-reviewed articles published between 2005 and 2024, the research highlights a growing academic and policy focus on the role of digital and knowledge-based flows in creating new economic opportunities. Notably, institutions such as the University of Cape Town and the University of Johannesburg have been instrumental in advancing this discourse. While the digital economy presents considerable potential, particularly through e-commerce, innovation, and entrepreneurship, to stimulate growth and empower small businesses, persistent structural barriers such as limited infrastructure, skill gaps, and weak policy frameworks continue to impede progress. In this context, the study underscores the urgency of integrating digitalization into national development strategies, not only to improve productivity across sectors like agriculture and manufacturing but also to enhance overall socioeconomic resilience. The results of the study call for longitudinal research to evaluate the long-term impact of digital transformation and knowledge-based flows. In addition, it advocates for a coordinated, multi-stakeholder approach that includes governments, the private sector, and academic institutions to fully unlock the transformative potential of digital and knowledge-based transformation and address the continent's socio-economic challenges. Such collaboration is essential to foster inclusive innovation ecosystems, ensure equitable access to research and technologies, and design forward-looking policies that align with local development goals, with the aim of repositioning Sub-Saharan Africa in the global digital landscape, promoting sustainable development, and significantly improving the quality of life of its population
This paper explores the intricate relationships among liquidity, subsidies and savings in Sub-Saharan Africa (SSA), underscoring their crucial roles in fostering economic stability and enhancing market performance. Employing a Panel VAR model, the findings reveal that bank liquidity significantly influences stock market returns, thereby emphasizing the necessity of maintaining adequate liquidity reserves to support lending and stimulate economic activity. While the analysis suggests that subsidies can enhance liquidity under favourable conditions, it also warns against over-reliance on such interventions, which may induce market distortions and inefficiencies. The relationship between gross savings and liquidity is multifaceted; although higher savings may initially curtail consumption, they ultimately serve as vital capital for investment and strengthen economic resilience. This study advocates for a comprehensive policy framework that includes establishing targeted subsidy programs, promoting a savings-oriented culture, and improving bank liquidity management. By prioritizing strategic government spending and investing in infrastructure, SSA countries can create a more stable economic environment that encourages sustainable growth and boosts investor confidence. Ultimately, these recommendations aim to enhance liquidity, stabilize credit markets, and support the long-term economic development of the region.
The aim of this paper is to examine the effects of financial inclusion (FI) on money velocity stability in WAEMU. To do so, we used data from the eight (8) WAEMU countries covering the period 2007-2020. The results of our estimations using the Pooled Mean Group (PMG), two-stage least squares (2SLS) and Generalized moment method (GMM) estimators reveal that an improved FI is associated with a decline of money velocity in both the narrow (V1) and broad (V2) sense in the WAEMU, and does not compromise its stability. Also, in the short term, the coefficients associated with the effects of the different financial inclusion variables on the velocity of money show the expected negative sign, but are statistically insignificant. Furthermore, our results show that in the long term, income per capita has a positive and significant effect on money velocity. While the nominal interest rate on loans and the nominal exchange rate have negative effects on money velocity in WAEMU. In this context, the monetary authorities of WAEMU can pursue their initiatives to foster FI, while emphasizing the use of formal financial services. But these innovations must be governed by an appropriate regulatory framework to avoid any spillover effects or abuses.
The emergence of Financial Technology in Sub-Saharan Africa has ignited a revolution, promising greater financial inclusion and efficiency. However, concerns remain about its potential impact on bank competition and risk. This study investigates how Fintech influences bank competition, funding, and risk within 11 SSA economies from 2016 to 2020, using data from S&P Capital IQ Pro, IMF Financial Access Survey, and World Bank databases. Our findings show that fintech reduces bank competition but increases bank funding unexpectedly. Increased competition indirectly lowers bank risk, highlighting a complex interplay between Fintech and market dynamics. These findings suggest that policymakers should prioritize regulations that foster responsible Fintech innovation while safeguarding financial stability. Fintech companies, on the other hand, must prioritize financial inclusion and robust security measures, while traditional banks must adapt to the evolving landscape while fortifying their risk management practices.
