Powering economic growth and development in Africa: telecommunication operations

Abstract

ABSTRACTThis study investigates the effect of telecommunication operations on economic growth and development in selected African countries. The analysis considers a panel of 46 African countries from 2000 to 2015. To measure economic growth, real gross domestic product serves as the proxy, while economic development is measured by the Human Development Index, and telecommunication operations by a composite index of telecommunication computed from mobile line, fixed/CDM line and Internet access penetration via principal component analysis. The physical capital stock is measured by gross fixed capital formation, level of employment by the employment to population ratio, human capital development by enrolment in secondary education for both sexes and technology transfer by net inflows of foreign direct investment in Africa. The empirical results suggest that telecommunication operations promote economic growth and development in Africa. These results imply that for every positive expansion in telecommunication operations and physical capital stock, aggregate output and standard of living will adjust positively in Africa. Thus, an appropriate policy to improve overall investment in Africa and most especially in the telecommunication sector since the spillover effect cut across other sectors and the general economic performance.