Abstract
This research employs an ex-post facto research design and makes use of the data provided by the World Development Indicators (WDI) of the World Bank as well as the Global Financial Development Database (GFDD) of the International Monetary Fund. Uncertainty variables were measured using the index developed by Baker, Bloom, and Davis, which establishes that policy uncertainty has a significant role in the economy. The independent variables include economic policy uncertainty (EPU) and growth shocks, measured through the volatility series of growth rates in Sub-Saharan African (SSA) economies. Financial system stability was assessed using the Z-score, given the banking-dominated nature of financial systems in these countries. The analysis employed panel descriptive statistics, correlation analyses, panel unit roots, as well as cross-sectional dependence tests. The main estimation technique is the panel autoregressive distributed lag (PARDL) model, where. examination of dynamic relationships among variables. Findings indicate that growth rate fluctuations had a significantly negative impact on financial system stability in SSA during the study period (∂ = -0.17, t-stat = 2.857, p-value = 0.004). Additionally, economic policy uncertainty had a notable effect (∂ = 0.32, t-stat = 2.111, p-value = 0.043). These results suggest that financial stability in SSA is not solely a monetary policy concern but is also influenced by fiscal policies, which can either enhance or undermine stability. This issue is particularly critical given the fragility of financial systems and the heavy reliance on fiscal factors in economic management. The study recommends a balanced approach to managing financial systems in SSA, considering the interplay between monetary and fiscal policies. Policymakers should focus on reducing policy uncertainty and mitigating growth shocks to ensure financial stability. Furthermore, the study highlights the need for further research on how fiscal policy instruments can serve as stabilization tools in fragile financial systems across crisis-prone regions. A deeper understanding of these interactions would help design policies that strengthen financial resilience and promote sustainable economic development.