COMPETITIVE CONDITION OF SUB-SAHARAN AFRICA COMMERCIAL BANKS

Joseph Olorunfemi AKANDE; Farai KWENDA

Authors

Joseph Olorunfemi AKANDE School of Accounting, Economics and Finance, University of KwaZulu-Natal, Durban, South Africa, Email - akandeo.joseph@gmail.com https://orcid.org/0000-0001-8445-8905
Farai KWENDA School of Accounting, Economics and Finance, University of KwaZulu-Natal, Durban, South Africa https://orcid.org/0000-0002-8241-4148

Keywords:

competitive condition, Sub-Saharan Africa, commercial banks, Lerner index, Generalised Method of Moments.

Abstract

https://doi.org/10.1515/subboec-2017-0009

This study assesses the competitive environment and the determinants of the Sub-Saharan Africa commercial banking sectors. We used the Lerner index that is generally acknowledged as the best at estimating the bank level competition and the Generalised Method of Moments (GMM) to study 440 commercial banks for the period 2006 to 2015. We found a monopolistic competitive banking market. We also observed that competition is driven by the level of bank capital including some bank specific variables. Hence, we concluded that the banking market of the SSA region is contestable and competitive. As such, we recommend, among other things, that policy makers should device measures to ensure an ongoing competitive banking environment while stimulating other economic variables to complement this feat.

JEL classification: G21, L10

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