This study explores whether Sub-Saharan Africa’s financial architecture gap explains its anomalous macro economic structures by undertaking an empirical panel econometric analysis of an original analytical model. Both bank funding and its interaction with banking sector returns expand the primary-secondary sector gap. In the long-run, stock market return interactions narrow this gap. Similar results were obtained for the service-secondary sector disparity. However, the dynamic panel regression reveals that primary sector output is negatively related to current production, suggesting possible sectoral correction. The opposite is found for the service sector.

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Keywords

Banks, Macroeconomic structure, Stock market, Financial system architecture, Sub-Saharan Africa.