Abstract
This study evaluates the influence of Information and Communication Technologies (ICT) investment and diffusion on Rwanda's economic growth. At the level we recommend, ICT imports greatly improve intermediate inputs to capital goods, resulting in increased economic growth. We use the most recent available data on technical innovation and investment for our empirical study, which spans the years 2005Q1 to 2020Q4. The results of regression analysis show that ICT development has little effect on Rwanda's economic growth. However, we notice a patchwork of information on ICT investment. We utilize ICT goods exports and imports as a proxy for ICT investment, based on previous research. Surprisingly, ICT goods exports have had no impact on Rwanda's economic growth. We do notice, however, that a 1% increase in ICT goods imports boosts economic growth by 3.9 percent. At this level, ICT goods import greatly boost the intermediate input to capital goods, resulting in increased economic growth. As a result, officials should ensure that ICT goods imports should be prioritized through supporting ICT investment to boost economic growth.
Highlights
Recent investments have fueled enormous expansions in the telecommunications industry, as well as becoming one of the major drivers of economic growth in several other key sectors
The results indicated that Internet users, the Information and communication technology (ICT) goods imports, ICT goods exports, internet users and mobile cellular subscriptions are positively and significantly correlated with economic growth in Rwanda
The influence of ICT investment and spread on Rwanda's economic growth is the subject of the first half of this study
Summary
Recent investments have fueled enormous expansions in the telecommunications industry, as well as becoming one of the major drivers of economic growth in several other key sectors. Rwanda's digital development has so far been marked by a significant state investment push in sectors like digital infrastructure and public service delivery This has enabled Rwanda to achieve some of the continent's highest 3G and 4G network coverage rates, giving mobile broadband to almost all Rwandans. To sustain the increased digitization of Rwanda's economy, substantial measures will be required in the future According to these findings, Rwanda's regulatory authorities should change their policies on ICT spread and development. To the best of our knowledge, there is no empirical data on the influence of technological innovation on Rwanda's long-term economic sustainability. This will be the first empirical assessment of the impact of ICT development on economic growth in the country.
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