Exchange Rate Misalignments and Economic Growth in Sub-Saharan Africa.

Summary In the face of the success of Southeast Asian economies, favored by an export-led growth strategy, a large literature has developed around the question of the impact of exchange rate misalignments on economic growth. Our work sheds additional light on this subject, focusing on the particular case of Sub-Saharan African economies whose overall growth trend seems to have picked up since the beginning of the 21st century. In this perspective, we first address the issue of determining the equilibrium exchange rate, since it serves as a reference in the evaluation of misalignments. This step allows us to address the question of the contribution of the exchange rate regime in limiting misalignments. It then appears that the contribution of the exchange rate regime in terms of limiting misalignments is ambiguous. At the end of this analysis, we then consider the actual evaluation of the influence of misalignments on the growth of 16 Sub-Saharan African countries. At the end of this research, the results obtained show that overvaluation has a negative impact on economic growth. However, undervaluation does not have a favorable effect, regardless of the institutional framework used. As a result, it seems that the solution of leaving the monetary union for Franc Zone countries cannot be justified by the hope of regaining additional leeway through exchange rate manipulation.