ACCESS TO ELECTRICITY, INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT), AND FINANCIAL DEVELOPMENT: EVIDENCE FROM WEST AFRICA

Oluwarotimi Ayokunnu Owolabi,Asa-Ruth Oboku Oku,Abidemi Alejo,Toun Ogunbiyi,Jeremiah Ifeanyi Ubah

doi:10.32479/ijeep.10344

Oluwarotimi Ayokunnu Owolabi, Asa-Ruth Oboku Oku + Show 3 more

Open Access

https://doi.org/10.32479/ijeep.10344

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Abstract

Poor Access to electricity may hinder West African countries from raising levels of financial development with the aid of Information communication Technology (ICT). Using 16 West African countries, and data over the period of 2000 to 2018, this present study analyses the effect of greater access to electricity on financial development through ICT. ICT was measured using mobile use and internet use, while financial development was measured using private bank credit to GDP ratio and Broad Money Supply to GDP ratio. Panel data fixed effect instrumental variables estimation was used for analysis and the study found that access to electricity significantly boosts mobile use and internet use, while resulting from access to electricity mobile use significantly boosted both measures of financial development but internet use significantly reduced the measures. Further categorizing sample countries into Anglophone and Francophone West Africa countries, access to electricity through ICT boosted both measures of financial development for Francophone countries, while only boosting broad money supply to GDP ratio for Anglophone countries. Thus greater access to electricity through for example provision of electricity infrastructure and regulation of electricity charges to households and firms is important to boost levels of financial development in West Africa.Keywords: Access to Electricity, Information communication Technology (ICT), financial development, Mobile subscription, Internet Use, West Africa,JEL Classifications: O16, O33, E51DOI: https://doi.org/10.32479/ijeep.10344

Highlights

Access to electricity is central to the processes driving the development of a country (Matthew et al, 2019; Ogundipe et al, 2016)
This study examined the effect of access to electricity through information and communications technology (ICT) in promoting financial development in a sample of West African countries over the period of 2000 to 2017
The study found using Panel data fixed effect instrumental variables estimation that while access to electricity boosted both measures of Information and Communications Technology (ICT) in the first stage of the regression, mobile phone use boosted both measures of financial development, while internet usage was found to adversely affect both measures of financial development

Summary

Introduction

Access to electricity is central to the processes driving the development of a country (Matthew et al, 2019; Ogundipe et al, 2016). Electricity powers activities, and contributes to the promotion of a conducive environment for economic progress. While powering the development of an economy as a whole, electricity may contribute to the economy through the economy’s productive sectors, and the value of electricity in terms of what it enables to take place may be realised. The financial sector is a further sector of an economy which must of a necessity be productive for the economy to make progress and for which electricity is essential. The achievement of the process of financial development depends on the availability of electricity amongst a variety of other factors

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