ENERGY CONSUMPTION, INFORMATION AND COMMUNICATION TECHNOLOGY AND ECONOMIC GROWTH IN AN AFRICAN CONTEXT

Bester Chimbo

doi:10.32479/ijeep.8118

Abstract

The study had two main objectives. Firstly, to investigate the impact of ICT on economic growth. Secondly, to explore whether energy consumption and human capital development are channels through which ICT influences economic growth in Africa. Whilst literature is unanimous when it comes to the positive impact of ICT on economic growth, not much has been investigated on the impact of the complementarity between (1) ICT and energy consumption and (2) ICT and human capital development on economic growth, especially in the African context. The current study used fixed effects, random effects, pooled OLS and the dynamic GMM with annual panel data ranging from 2001 to 2015. Whilst fixed and random effects show a significant positive relationship running from ICT towards economic growth, pooled OLS and the dynamic GMM produced results which show that ICT had a non-significant positive influence on economic growth in Africa. The interaction between ICT and energy consumption had a significant negative effect on economic growth across all the panel data analysis methods. The finding means that ICT enhanced economic growth through its energy efficiency impact in Africa, consistent with Lee and Brahmasrene (2014). The interaction between ICT and human capital development was found to have had a significant positive effect on economic growth in Africa, in line with Ortiz et al. (2015) whose study revealed that the complementarity between ICT and education enhanced economic growth. The study therefore urges the African continent authorities to develop, strengthen and implement sound human capital development in order to enhance the impact of ICT on economic growth. African countries are also urged to implement sound ICT growth policies in order to trigger energy efficiency led economic growth.

Highlights

To date, there is rather weak and ambiguous empirical evidence on the contribution of Information and Communication Technology (ICT) investments on economic growth for emerging and especially developing countries (Niebel, 2014)
It observed that it is based on narrow economic theory that ignores both the controversies that surround it and empirical evidence of alternative development policies The results indicate that a long‐run equilibrium relationship exists between ICT development and economic growth
The findings provide evidence of significant uni‐directional short‐run causality running from economic growth to ICT development in the Iranian economy Results show that mobile banking adherence and e‐health are statistically significant to economic growth The results reveal a positive and significant direct effect of ICT proxies on economic growth

Summary

Introduction

There is rather weak and ambiguous empirical evidence on the contribution of ICT investments on economic growth for emerging and especially developing countries (Niebel, 2014). Several recent empirical studies (Khalili et al, 2014; Niebel, 2014; Ortiz et al, 2015; Saidi et al, 2015; Aghael and Rezagholizadeh, 2017; Stanley et al, 2018; Karlsson and Liljevern, 2017; Das et al, 2016; Shahbaz et al, 2016; Tuyisabe et al, 2018) have investigated the impact of ICT on economic growth. The findings from these empirical studies are mixed, diverse and divergent.

Methods

Results

Conclusion