Financial Liberalization and Financial Development : Does World Financial Crisis consistently stifle Economic Growth in West African Economic and Monetary Union ?

The purpose of this study was to investigate the effect of international financial integration, financial development and world financial crisis on economic growth in the West African Economic and Monetary Union (WAEMU) for the period 1990-2020. Employing Panel Fixed-effects regression / Driscoll-Kraay standard errors technique, the findings of this study reveal that international financial integration and world financial crisis have a positive and statistically significant effect on economic growth in the region. However, financial development has a positive and insignificant influence on economic growth. The results further indicate that inflation and trade openness have a negative impact on economic growth in the region while local currency depreciation has a positive and significant effect on economic growth. Arising from these findings, this study recommends that the central bank of the monetary union employs a combination of monetary and fiscal policies in order to address the issue of financial crisis, trade openness and inflation problem so as to boost economic growth in the countries under investigation.