Abstract
The research implemented the panel based Seemingly Unrelated Regression (SUR) methodology to investigate the potential link between the African stock markets, banks and economic growth in the presence of inflation. The study covers a period of 24 years (1988-2011). Panel Cross sectionally augmented Im-Pesaran-Shin (CIPS) and error-correction-based tests for panel cointegration are used to account for possible cross-sectional dependencies among the seven African countries investigated in this study. The results show that there is, in the long-run, a positive impact of these financial intermediaries on the economic growth in Africa. The impact will be much greater in the development of stock markets than the banks. The extent is much greater in South Africa, as for every 1% increment in her stock value brings about 15.17% change in her economic growth. However, the directions of causality between these financial intermediaries and economic growth are mired. Negative and statistically significant estimates of coefficient of the inflation suggest the fact that substantial rise in inflation deters financial development.

Key words: Stock, Market, Development, Economic and cointegration