**5. Conclusions**

This paper focuses on the influence of the real exchange rate and its volatility on the finance-growth nexus using both panel and disaggregated data of West African countries. It employs different econometric techniques such as MG, PMG, IV and SUR estimators8. The study reveals that financial development has a positive impact on economic growth, but the impact is weakened by the real exchange rate and its volatility. Thus, the marginal effects of financial development on economic growth computed at lower levels of the real exchange rate or its volatility are larger than the marginal effects computed at higher levels. The higher the real exchange rate and its volatility, the less that finance spurs growth.

The implication of this study is that high real exchange rate and high volatility adversely affect the finance-growth nexus in the West African region. Hence, a reduction or stability in the real exchange rate is fundamental for financial development to enhance economic growth in West African countries. This study has succeeded in revealing the impact of the real exchange rate and its volatility on the finance-growth nexus within panel and disaggregated data framework. Therefore, future study may complement this study by examining the threshold levels of the real exchange rate and its volatility beyond which the marginal effects of financial development on economic growth turn negative. Apart from the level and volatility of the real exchange rate, future research could also investigate the influence of the real exchange rate misalignment, currency overvaluation (undervaluation) or real exchange rate regimes on the finance-growth nexus.

**Author Contributions:** Both authors contributed equally to the paper.

**Funding:** This research received no external funding.

**Conflicts of Interest:** The authors declare no conflict of interest.
