Information and communication technologies role in alleviating poverty in Sub‐Saharan Africa: Impacts and transmission channels

Abstract

AbstractResearch has continued to indicate that the proliferation of information and communication technologies (ICTs) has the potential to alleviate poverty in developing countries. While theoretically, there are several mechanisms through which ICT may reduce poverty, they have not been empirically tested sufficiently. The present study aimed to recognize the mechanisms through which ICT may reduce poverty for a sample of 37 economies in the Sub‐Saharan Africa (SSA) region during the period 2003–2019. Altering the income distribution, improving the ecological system, increasing the employment rate, increasing per capita income, and improving institutional quality were the assumed mechanisms through which ICT may reduce poverty. The results of the two‐step system GMM technique showed that while an increase in the per capita income and employment rate contributed positively to poverty reduction, improvement in the environmental quality increased the poverty rate. The causal mediation analysis findings showed that ICT strengthened the negative impact of worsening the quality of the environment on poverty. However, the strengthened positive impact of ICT on poverty through employment and per capita income was greater than the negative influence through the environmental mechanism. Thus, all national strategies or initiatives aimed at reducing poverty in SSA must incorporate pro‐poor ICT policies.