How does the central bank recapitalization policy affect competition in commercial banks of Sub-Saharan Africa?

In the last two decades, central banks in Sub-Saharan African (SSA) countries have witnessed a trend of recapitalization policy for commercial banks, and many more are bracing up to undertake same reform. This has raised debates on whether how it affects competitiveness banks. Nevertheless, empirical evidence remains sparse inclusive, especially SSA countries. It is this premise that study, therefore, investigates competition before after six selected The study employs Panzar-Rosse model analyze bank-level macroeconomic indicators between 2000 2015. results show H-statistic increased from –0.15, –0.28 -0.82 capitalization 0.94, 0.97 0.7 first, second third estimations respectively. showed bank higher period than recapitalization. concludes could be necessary, with low minimum paid-up capital. extent can now self-reliant capacity invest, as will significantly improve banks’ services. AcknowledgmentThis research was supported by grant Economic Research Consortium, Nairobi Kenya. findings, opinions recommendations those authors do not necessarily reflect views its members or AERC Secretariat.