Financial Development and Economic Growth in Sudan: Empirical Assessment Based on an Application of the Autoregressive Distributed Lag (ARDL) Model

This study investigates the effect of fi nancial
development on economic performance in Sudan over
the period (1970- 2007) by using the Autoregressive
Distributed Lag (ARDL) approach to co-integration. The
main empirical fi ndings indicate a weak relationship
between fi nancial development and economic growth
in Sudan. These fi ndings may be attributed to the
ineffi cient allocation of resources by banks, along
with the absence of an appropriate investment climate
required to foster signifi cant private investment and
promote growth in the long run, and to the poor quality
of credit disbursal of the banking sector in Sudan.