ICT Adoption and Economic Growth Nexus: Evidence from Leading African Economies

Abstract

This paper examines the impact of information and communication technology (ICT) on output growth in Nigeria, South Africa, Egypt, Algeria, Morocco, Libya, Sudan, Kenya, and Ghana. We use annual data on GDP (PPP) to proxy economic growth whilst internet users, mobile phone users, telephone users, personal computers users, and school enrolment (tertiary) covering from 1990 – 2013 were used to proxy ICT. The data were analysed in a dynamic panel environment using the 2SLS method. The robustness of the 2SLS result was confirmed by the GMM regression. The results imply a positive relationship between ICT and economic growth in accord with earlier studies. Few of the earlier studies investigate the causality aspect of the relationship and the few that did use ICT directly without resolving it into its sub-variables as done in this study. The Granger causality test results indicate that only fixed wireless communication system Granger cause GDPPPP out of the five predictors suggesting that the other ICT predictors merely associate with GDP not necessarily Granger cause it as most of the earlier studies erroneously suggest. The policy implication is that the affected countries should give policy priority to development of ICT infrastructure with specific emphasis on the fixed wireless communication system as precursors for ensuring sustainable growth in the medium and long - term.