International Research Journal of Innovations in Engineering and Technology - IRJIET International Open Access, Monthly, Peer Reviewed, Reputed Journal ISSN (online): 2581-3048

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DOI Prefix: 10.47001/IRJIET

The Link between Financial Development and Economic Growth Case of Rwanda

Abstract

The connection between financial development and economic growth is not definite in the existing economics literature. This study analysis was performed by the dynamic error correction mode (VCEM) to check the impact of financial development on economic growth in Rwanda. The empirical results confirmed that commercial product proxied by credit given by the financial sector and money supply is insignificant for short, while FDI contributes for short and long. Rwanda aims to become a middle-income country by 2035, which requires raising the level of income of the citizens throughout investment projects and harmonized economic policies that attract foreign investments as the primary determinant of economic growth. Therefore developed financial system is imperative to Rwanda as every investor needs to operate in an efficient financial system.

Country : China / Rwanda / Sierra Leone

1 Mugabe Roger2 Peter Umaru Kamara3 Aruna Bakarr4 Abdulai Bobson Turay

  1. School of Economics, Wuhan University of Technology, Wuhan 430070, P. R. China & School of Social Sciences, Kigali Independent University ULK, Kigali, Rwanda
  2. School of Social Sciences, University of Management and Technology, Freetown, Sierra Leone
  3. School of Social Sciences, University of Management and Technology, Freetown, Sierra Leone
  4. Faculty of Social Sciences, Ernest Bai Koroma University of Science and Technology, Magburoka, Sierra Leone

IRJIET, Volume 5, Issue 2, February 2021 pp. 97-102

doi.org/10.47001/IRJIET/2021.502014

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