Abstract
The study evaluated the impact of fiscal shocks on financial system stability in Sub-Saharan Africa for the coverage period, 1973 to 2023 and the cross section represents 48 countries in Sub-Saharan Africa. The independent variables were Revenue Shock, Public Expenditure Shock, Public Debt Shock, Growth Shocks, Interest Rate and Exchange Rate Shocks, which were used to measure fiscal shocks while the dependent variable isfinancial system stability measured by Z-score. Using dynamic panel least squares, the study found that Fiscal shocks arising from public expenditure, growth and Innovations Innovations, Number 78 September 2024 660 www.journal-innovations.com revenue adversely affected financial system stability while those arising from debt and interest rate positively and significantly affected the stability of the financial system in SSA countries within the investigated period. This study exposes the fact that the stability of the financial is not only a monetary policy issue rather fiscal policy also can help stabilize or add to the destabilization of the SSA countries financial system. This factor is amplified by the fragility of the SSA financial system and the fiscal dominance in the management of the economy of the region which makes policy retooling imperative for averting system failures and destabilisation.