The Effect of Private Investment on Real Interest Rate in CFA Franc Zone
Emmanuel Blaise Efon Ngouo *
University of Dschang, Cameroon.
Luc Nembot Ndeffo
University of Dschang, Cameroon.
*Author to whom correspondence should be addressed.
Abstract
This paper investigates the effect of private investment on real interest rate in CFA franc zone during the period 1980-2015. To attain this objective, the methodology adopted is the system Generalized Method of Moments (GMM). The result shows a negative and significant effect of private investment on real interest rate. In view of the result obtained, we suggest that African countries in the franc zone should vigorously pursue the establishment of favorable conditions for the development of private sector. Public policies for improving private investment should be promoted: improving the business climate, ameliorate political environment, fight against terrorism ravaging part of Africa including Mali.
Keywords: Private investment, real interest rate, CFA franc zone, generalized method of moments