Competitiveness of Togolese Banking Sector

Abstract

Development of a country depends on it s economic growth which depends also on several factors which can be both micro and macroeconomic. The financial sector is the lung of the economy ; more exactly the banking sector contributes in a non negligible part to this growth. The competitiveness, effectiveness and efficiency of banking sector make it reliable to the economy. Unfortunately , evidences have shown that most Sub-Saharan countries don’t rely much on their financial sector, mainly due to challenges they face. This paper aims to analyze the competitiveness and the driving factors in Togolese banking sector with macroeconomic development using Structure-Conduct and Performance (SCP) framework and regression models. The research covers a period of sixteen years (from 2000 to 2015), with ten banks. This research proxies the asset in a panel A and profit in a panel B for the bank’s competitiveness. The results are of panel regressions with fixed effects and robust standard errors. Considering the Panel A, the variables Inter-Banks loans, customers loans, Inter-Banks Debts, Customers Debts are the driving factor of the competitiveness. However , the size of the bank proxied by profit has no impact on the competitiveness. The result suggests that the reform which has started since 1990 should be completed; there should be organizational and financial restructuring.