Financial Integration and the Growth of Selected Nations in ECOWAS

Abstract This study investigated the impact of financial integration on the growth of selected nations in Economic Community of West African States (ECOWAS) between 2001 to 2024. The specific objectives of the study are to examine the effect of financial soundness, exchange rate and tariff on economic growth in ECOWAS. The study collected panel data from the World Bank, WTO and UNCTAD and used the fixed effect model to analysed the relationship between the independent variables and the dependent variable. Based on the fixed effect model, the findings showed that, export financial soundness was found to have positive and significantly effect on economic growth in ECOWAS. Also, exchange rate has positive and significant effect across ECOWAS member states. Nevertheless, tariff has negative and insignificant effect on economic growth in ECOWAS. In line with the results, the study concludes that, financial integration exerts a meaningful influence on economic growth in ECOWAS. Based on the findings, it was recommended that, there should be diversification of ECOWAS economy in terms of exports. Thus, financial integration should lead to better diversification of risks and makes a positive contribution to financial stability by improving the capacity of economies to absorb shocks. Keywords: Financial soundness, Exchange rate, Fixed effect, Financial integration, Tariff