| المستخلص: |
This study examines the relationship between the financial sector development and economic growth in Africa, with emphasis on evidence from Zambia during the period (19922012-). It begins with a discussion of theoretical and empirical studies on this relationship, then focuses on Zambia, using econometric analysis to estimate the tools and direction of the causal relationship between the financial sector development and economic growth in Zambia since 1992. The study is arranged into four parts. The first presents the background theory of the studied relationship. The second presents the empirical findings on the evolution of this relationship. The third demonstrates the stages of developing the financial sector in Zambia. The fourth is an application of the autoregressive distributed lag approach (ARDL) to measure the studied relationship in Zambia during the period (19922012-). The study finds a unique co-integrating relationship among real GDP per capita and financial development. The results suggest that financial development exerts a positive and statistically significant effect on economic growth in the short and long terms. As for the causal relationship, there are uni-directional causal flow from the financial sector development to economic growth, and this result is consistent with hypothesizing the supply as leading the relationship between the financial sector development and economic growth. In conclusion, a set of recommendations for improving the financial sector role in Zambia’s economy are proposed, including the adoption of short-term and long-term policies to ensure the development of financial sector, activation of the role of non-banking financial institutions sector, establishing new financial institutions to increase the provision of credit to the private sector, and enhancing the Lusaka Stock Exchange operations as a source of financing medium and long term investments
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