Financial Development: A Comparative Analysis in Growing Sub-Saharan Africa Countries with Special Reference to Ethiopia

This study deals with the comparative analysis of financial development in the top fourteen growing economies of Sub-Saharan Africa-Angola, Botswana, Cote d`Ivorie, Congo Democratic Republic, Ethiopia, Ghana, Rwanda, Liberia, Niger, Nigeria, Sierra Leone, South Africa, Tanzania and Zambia with special reference to Ethiopia. Unlike the traditional measures of financial development like broad money to GDP ratio, private sector credit to GDP ratio, Stock market turnover and others, this study developed a financial development index and sub-indices in terms of access, depth and efficiency from available financial development indicators through factor analysis. The result found out showed that as compared to the well performing country South Africa, the other countries financial development is nascent. Ethiopia has relatively better position in depth and efficiency of financial institutions. However, it lags behind in terms of access to financial institutions and the financial market development.