Financial inclusion and monetary policy targets: Evidence from the ECOWAS countries

Tuwe Soro Garbobiya (1) Olajide Oladipo (2) Paul Terhemba Iorember (3)
(1) Central Bank of Nigeria, Nigeria
(2) Nile University of Nigeria, Nigeria
(3) Nile University of Nigeria, Nigeria


The study examines the impact of financial inclusion on monetary policy targets in the Economic Community of West African States for the period between 2004 and 2020. To capture how a shock to financial inclusion affects monetary policy targets in the ECOWAS sub-region, the study employs panel vector autoregression via the Generalized Method of Moments framework and uses the impulse response functions. The results show that in all ECOWAS countries, financial inclusion leads to an appreciation of the local currency, thereby improving the value of the exchange rate. However, it reduces the effectiveness of monetary policy. In particular, financial inclusion increases consumer prices and interest rates. Based on the findings, the study recommends, among others, the need for a single monetary policy in the ECOWAS sub-region to properly integrate its monetary policy framework in line with the economic and monetary integration policy of the West African Monetary Zone.

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Tuwe Soro Garbobiya
Olajide Oladipo
Paul Terhemba Iorember (Primary Contact)
Author Biographies

Tuwe Soro Garbobiya , Central Bank of Nigeria

Department of Monetary Policy, Central Bank of Nigeria; email:

Olajide Oladipo , Nile University of Nigeria

Department of Economics, Nile University of Nigeria; email:

Paul Terhemba Iorember, Nile University of Nigeria

Department of Economics, Nile University of Nigeria; email:  

Garbobiya , T. S., Oladipo , O., & Iorember, P. T. (2024). Financial inclusion and monetary policy targets: Evidence from the ECOWAS countries. Modern Finance, 2(1), 84–100.

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