Abstract
The study examines the effectiveness of financial development, financial access, and ICT diffusion in reducing the severity and intensity of poverty in Sub-Saharan Africa (SSA). Using data from the World Bank’s World Development Indicators, and the Global Consumption and Income Project (1980–2019), we provide evidence robust to several specifications from the dynamic system GMM and the panel corrected standard errors estimation techniques to show that, compared to financial access, ICT usage, and ICT access, ICT skills is remarkable in reducing both the severity and intensity of poverty. The results further unveil that, though ICT skills reduce the intensity and severity of poverty in SSA, the effect is more pronounced in the presence of enhanced financial development and financial access. Policy recommendations are provided in line with the region’s green growth agenda and the rise in technological hubs of the region.
Highlights
Before the coronavirus disease (COVID-19) struck in late 2019, growth in Sub-Saharan Africa (SSA) compared favourably to that of the world
From the financial development–information and communication technologies (ICTs) channels, we find that enhancing ICT access, ICT usage and ICT skills by 1 per cent given the current state of the region's financial development reduces the intensity of poverty by 0.03 per cent, 0.03 per cent and 0.09 per cent, respectively
The results further show that while enhancing ICT usage, ICT skills and ICT access can reduce the intensity of poverty in SSA, the effect can be amplified with enhanced financial access
Summary
Before the coronavirus disease (COVID-19) struck in late 2019, growth in Sub-Saharan Africa (SSA) compared favourably to that of the world. Growth in the region averaged 3.2 per cent in 2018 and 3.4 per cent in 2019 compared to the world's average of 3.5 per cent and 2.8 per cent in respective periods (IMF, 2020a). Notwithstanding the deepening of efforts by African leaders to foster shared prosperity as enshrined in The Africa We Want by 2063, academic and political discourses in the SSA have largely centred on economic growth (Ofori, 2021; Ofori and Asongu, 2021a; Greenwald and Stiglitz, 2013). In the wake of the coronavirus pandemic, attention has turned considerably towards building shared growth, with the agenda of Leaving No One Behind taking centre stage. The plummeting of the region into a record 1.9 per cent contraction in economic activity in 2020 (IMF, 2020a; World Bank, 2020a) can be traced to the fact that the region is highly informal, unequal and disadvantaged (World Bank, 2020b; Ravallion and Chen, 2019)
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