Financial Market and Economic Growth in Equatorial Guinea

This study examined financial market and economic growth in Equatorial Guinea. Despite its rich natural resources, Equatorial Guinea faces significant challenges in developing its financial market, which hinders the country's ability to achieve sustainable and inclusive growth. Hence, the study examined the nexus between financial market and economic growth in Equatorial Guinea, Annual time series data sourced from the World Development Indicators were employed. Economic growth was proxied by real gross domestic product while financial market was captured by domestic bank credit. The bound testing and Autoregressive Distributed Lag model estimation techniques were employed for the analysis. It was revealed that a long run relationship exists among the variables in the estimated model. A positive relationship exists between domestic bank credit, foreign direct investment and financial market in Equatorial Guinea. The implication of the findings is that financial market influences the economic growth of Equatorial Guinea. Hence, the study recommends that; there is need for implementing of policies that will enhance the expansion of domestic credits by deposit money banks to investors for economic growth; attract foreign direct investment through the provision of conducive business environment; and monitor exchange rate of the currency vis-à-vis the United States dollar.