Impact of Information Communication Technology (ICT) on Economic Growth: Sub-saharan Countries (2000 – 2022)
DOI:
https://doi.org/10.47604/ijecon.3149Keywords:
Information Communication Technology (ICT), Economic Growth, Mobile Phone Penetration, Broadband Subscriptions, Internet Usage, Fixed Telephone Subscriptions, Real GDP, Foreign Direct Investment (FDI), Gross Fixed Capital Formation, Trade Openness, Panel Data Analysis, Fixed Effects Model, ICT Policies, ICT Diffusion, Telecommunication Infrastructure, Inflation, Digital Literacy, Productivity, Financial InclusionAbstract
Purpose: In the 21st Century, the global economy has experienced significant technological changes, with the recent integration being Artificial Intelligence. In Subsaharan countries, information communication technology is highly adopted across almost all key economic sectors. The significant ICT diffusion in these SSA countries has enhanced economic growth. The study investigates the impact of Information and Communication Technology on economic growth in Subsaharan countries.
Methodology: The study analyzed panel data from 46 SSA countries over the 2000–2022 period. It collects panel data between 2000 and 2022 from 46 SSA countries. It employs a fixed-effects model to explore the relationship between Information and Communication Technology indicators, including mobile phone penetration, broadband subscriptions, internet usage, and real Gross Domestic Product.
Findings: Study findings reveal that mobile phone subscribers per 100 people exhibit a statistically significant impact on economic growth, with a 1% increase associated with a 14.9% rise in real GDP. Also, fixed-broadband subscriptions have a significant positive association with real GDP. Fixed telephone subscriptions reveal a negative relationship, signaling a shift from traditional telephony to mobile technology. However, the percentage of persons using the Internet shows a positive but statistically insignificant impact on economic growth. Foreign direct investment shows a significant positive relationship with real GDP. Moreover, gross fixed capital formation demonstrates a significant positive impact on real GDP, underlining the importance of investment in physical infrastructure for economic growth in SSA. Conversely, trade openness exhibits a statistically significant negative relationship with real GDP, highlighting the impact of trade liberalization.
Unique Contribution to Theory, Practice and Policy: Policymakers in SSA should prioritize investments in digital infrastructure, particularly in broadband and mobile technologies, to foster economic growth. Strategies to attract Foreign Direct Investment in ICT sectors are crucial for enhancing productivity and innovation. Governments should address the challenges of trade openness by implementing policies that support domestic industries while encouraging balanced trade liberalization. Lastly, efforts to improve digital literacy and bridge ICT accessibility gaps are vital to fully harness the potential of ICT in driving inclusive growth in the region.
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