Monetary Policy And Human Capital Development In Selected Sub-Saharan African Countries

Abstract

The study assessed monetary policy and human capital development in 30 selected Sub-Saharan African (SSA) countries. Panel data from the World Development Indicators (WDI) and the United Nations Development Programme (UNDP) from 1986 to 2022 were utilized for the analysis. Estimation was conducted using the Autoregressive Distributed Lag (ARDL) model. The dependent variable was human capital development, whereas the independent variables were the lending rate and exchange rate. In the long run, the results of the analysis demonstrated that the expansion of human capital during the study period was not significantly impacted by the lending and exchange rates. In contrast, both variables had a positive and considerable short-term influence on human capital development. Policymakers must recognize the interdependency of these essential components in order to handle the complexity of a dynamic global economy. The development of human capital must be a key element of economic policy frameworks, and governments as well as monetary authorities must put these plans into action. The workforce is strengthened, and overall welfare is enhanced by policies that make it easier for people to acquire quality healthcare, education, and skill development.