The impact of digital technology usage on economic growth in Africa

Abstract

This study analyses the impact of the use of digital technology on economic growth for 39 African countries from 2012 to 2016. This analysis applies a system GMM estimator to understand the extent to which the usage of digital technology facilitates growth using a measure of digitalisation from the Networked Readiness Index. Unlike previous research, we distinguish between the impact of individual, business, and government ICT usage on growth and show that only individual usage has a positive impact. Furthermore, a disaggregated analysis of the types of usage reveals that two indicators, social media and the importance of ICTs to government vision, are significant for growth.

Highlights

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  This paper examines the impact of the usage of digital technology on economic growth in 39 African countries from 2012 to 2016 using the system GMM estimator.

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  We utilise a measure of digitalisation derived from the Networked Readiness Index.

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  Unlike previous research, we distinguish between individual, business, and government ICT usage on growth and show that only individual usage has a positive impact.

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  We implement a disaggregated analysis of the types of usage to show that social media and the importance of ICTs to government vision are significantly related with economic growth.

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  Government policy that actively integrates ICT usage across business sectors and for individual use would enhance competitiveness.