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Abstract
Sub-Saharan Africa has witnessed a low growth trajectory compared to other western countries. This has been mainly attributed to the policy frameworks in the region, as countries often fail to structurally adjust macroeconomic policies for sustainable growth in the region. The objective of this paper is empirically examine the application of monetary policies for economic management in Sub-Saharan African countries. The study used time series data from two African countries, specifically Kenya and Rwanda to examine the effect of broad money on gross domestic product growth rate. The study relied on secondary data; obtained from the World Bank Development Indicators database. The study analysed the data using both descriptive and inferential statistical technique. The hypothesis was tested using the Ordinary Least Squares (OLS) technique. The data were checked for normality and subjected to Unit Root tests using the Dickey Fuller, Augumented Dickey Fuller and Phillips-Perron text prior to further analysis. The results confirmed the stationarity of the data. The descriptive statistics showed that all variables were normally distributed. The OLS result showed that broad money growth had a positive statistically significant effect on GDP growth rate of both countries. Based on this, the study recommends, among others that countries in Africa borrow from the policy frameworks of the two countries in order to boost growth and development. To implement monetary policies that can spur entrepreneurship growth in the region; such as a slated minimum capital funding for entrepreneurs.