Information and Communication Technology (ICT) Diffusion and Economic Growth in Sub-Saharan Africa: Evidence from Dynamic System GMM Estimation

Abstract

This study investigates the heterogeneous impacts of information and communication technology (ICT) diffusion on economic growth across all 48 Sub-Saharan African (SSA) countries from 2002 to 2023. Employing the Two-Step System Generalized Method of Moments (System GMM) to address endogeneity, dynamic persistence, and unobserved heterogeneity, the study simultaneously examine four distinct ICT indicators: mobile cellular subscriptions, internet usage, fixed broadband subscriptions, and fixed-line telephone subscriptions. Results reveal sharply divergent effects: mobile subscriptions and fixed broadband significantly boost GDP per capita, underscoring their roles as catalysts for financial inclusion and structural transformation. In contrast, internet usage exhibits a robustly negative effect, suggesting that unstructured digital access without complementary investments in digital literacy, institutional quality, or regulatory frameworks may impede growth. Fixed-line telephony also shows a significant negative association reflecting its technological obsolescence in SSA’s mobile-leapfrogged landscape. Diagnostic tests confirm the validity and stability of our preferred specification. These findings challenge the notion of ICT as a monolithic growth engine and highlight that developmental returns are contingent on technology type and enabling conditions. The study offers actionable policy guidance for maximizing the growth dividends of digital transformation in SSA.