ICT investment drives inclusive growth but not alone

  • “Investment in ICT infrastructure and inclusive growth in Africa” published in Scientific African this month examines the relationship between ICT investment and growth.
  • Rural areas should be the focus of ICT investment.
  • Access to electricity is critical to drive growth in the ICT sector.

The fourth industrial revolution (4IR) is a talking point that we are, quite frankly, sick of hearing about. At this point in our modern society it’s become painfully obvious that technology is one of the best ways to improve the lives of citizens.

Whether that be through smart cities, digital services or any other modern advances. We know that anecdotally the benefits of technology have been highlighted, but now a new study coming out of Stellenbosch University shows that investing in ICT can push growth forward.

In a paper titled “Investment in ICT infrastructure and inclusive growth in Africa” published in Scientific African this month, Dr Mamello Nchake from the Department of Economics at Stellenbosch University and Dr Mohammed Shuaibu from the Department of Economics at the University of Abuja in Nigeria, explored how ICT investment benefits the continent.

The researchers found that ICT infrastructure development has a positive and significant impact on inclusive growth on the continent. This is based on the analysis of 46 countries in Africa from 2000 to 2019.

“An increase in ICT infrastructure investment stimulates inclusive growth by an average of 0.4% to 0.7%,” explain Nchake and Shuaibu. “Our results make a strong case for increased ICT infrastructure investment, especially in rural areas, to generate inclusive growth in the continent and to take full advantage of emerging opportunities from the Africa Continental Free Trade Area Agreement.”

As the pair showcase, one investment helps drive another, so for example, investing in the ability to create digital identities make it easier for banks to track credibility increasing financial inclusion. This extends to the agricultural sector where farmers can get access to markets and digital services that can help them improve the value of their produce.

“Furthermore, digitisation and investment in ICT infrastructure can serve as a veritable tool to reduce poverty, inequality and unemployment in the continent and to drive inclusiveness given that African youths are tech-savvy, resilient and adaptable to the rapidly evolving global digital economy,” the researchers explain.

Pointing to a report by the Global System for Mobile Communications Association from 2021, the researchers highlight that by 2025, 615 million people in sub-Saharan Africa will be subscribed to mobile services. In the same year, it’s estimated that $155 billion could be generated by mobile technologies and services.

However, there is work to be done beyond ICT infrastructure.

The researchers emphasis that better access to electricity is a requirement if African nations hope to increase access to internet services and broadband penetration. The research highlights that only 38 percent of Africans have access to electricity and internet penetration sits at an incredibly low 10 percent.

The crux of the paper is that there must be greater investment in projects that push ICT development forward and don’t burden those trying to champion innovation.

“Strengthening regional policy and regulatory frameworks that push for more support and competitiveness of the ICT sector such as reduced licensing charges and application and registration procedures as well as promoting non-discriminatory access to critical ICT infrastructure could be considered,” the researchers add.

As we mentioned, these points have been mentioned over the years that 4IR has been in discussion but it’s great to have data we can look at that shows just how intrinsically linked ICT investment and inclusive growth are, especially outside of metropolitan areas.

[Image – CC 0 Pixabay]


About Author


Related News