Nexus between ICT diffusion and poverty level In Sub- Saharan African (SSA) countries

Abstract

This empirical quantitative research focuses on examining the nexus between diffusion and poverty levels in all Sub-Saharan African countries from 1989-2019. The study's main goal is to figure out how ICT can help countries in Sub-Saharan Africa reduce poverty. A Panel Vector Autoregressive model and Generalised Method of Moments were employed in the research methodology. Panel data was obtained from the World Bank and the International Telecommunication Union. In addition, a number of diagnostic tests were carried out in the study. Empirical results suggested that information and communication technology is useful in poverty reduction. Primary research findings showed a long-run relationship between information and communication technology usage (fixed telephone, mobile telephone and internet usage), foreign direct investment, development aid, primary school enrollment, real GDP per capita, remittances, and private domestic credit. Fixed effects and random effects results showed that an increase in information and communication technology leads to a decrease in poverty levels in the Africa region. Causality tests depicted bidirectional causality between information and communication technology and real gross domestic product per capita. Results from the Vector Error Correction estimates revealed that changes in impact real gross domestic product per capita. Results from the Generalised Method of Moments and the Panel Vector Autoregressive model suggest that an increase in the usage of information and communication technology can lead to reduction in poverty levels. These findings show that in Sub-Saharan Africa, every expansionary activity in information and communication technology leads to higher living standards and/or higher real gross domestic product per capita. In terms of policy recommendations, it is suggested that Sub-Saharan African countries should increase their investment in information communication technology sector, create a conducive environment for investment attraction, and as well as the liberalize the sector to ensure that meaningful gains materialise that ultimately reduce poverty.