African Economic and Monetary Union (WAEMU)
Files
Date
2009-12-07
Authors
Sandrine Kablan
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
This paper measures the efficiency of WAEMU banks and its determining factors, after
the banking system reforms from 1993 to 1996. Data envelopment analysis (DEA) was
used for assessing technical efficiency and a stochastic frontier analysis (SFA) for cost
efficiency. Results suggest similar evolutions for the two types of efficiency for all
WAEMU countries except Côte d’Ivoire and Burkina Faso. A detailed analysis per banking
shareholder’s equity group reveals that local private banks are the most efficient ones,
followed by foreign and then state-owned banks. Despite the technological changes that
occurred in the banking system, the Malmquist index shows that the increase of technical
efficiency is much more a factor of scale efficiency change than of the incorporation of
technological innovations. Lastly, WAEMU banks’ efficiency is sensitive to variables
like financial soundness, the ratio of bad loans per country, the banking concentration and
the GDP per capita.
Description
HG 1370
Keywords
Banks and Banking- Africa , West , international finance , International Monetary Fund