Financial Liberalisation and Financial Sector Development in Cameroon

Ngeh Ernest TINGUM, Neba Cletus YAH

Abstract


The aim of this study is to investigate the effect of financial liberalisation on the development of the financial sector in Cameroon. To achieve this aim, we construct financial liberalisation and financial development indexes for Cameroon before employing the ARDL cointegration approach to analyse annual data for the period 1973 to 2018. The results show that financial liberalisation and macroeconomic stability significantly and positively affect the development of the financial sector in Cameroon. Also, the level of democratisation was found to negatively affect financial development. As the level of democratisation captures the institutional quality of a country, this suggests that the country’s quality of institutions is very weak. These results have far reaching policy implications in that any policy geared at fostering the development of the financial sector in Cameroon should take into consideration factors such as macroeconomic stability, democracy and institutional quality.


Keywords


Financial liberalisation; financial sector development; Cameroon; ARDL

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References


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