The impact of information and communication technologies on international trade: A case of Sub-Saharan Africa

Abstract

The aim of this research is to analyze the effect of information and communication technologies (ICT) on the bilateral trade flows of the countries of Sub-Saharan Africa (SSA). We use the method of generalized least squares (GLS) panel to correct for correlation and heteroskedasticity problems. We have employed the gravity model extended to ICT to examine the effects of key ICT indicators on bilateral exports and imports. The sample includes 44 African countries of the subcontinent, including 43 countries as partners (importers/exporters) and one reporter country (exporter/importer) and covers the period 2010 to 2019. The results show that access to mobile telephony and the internet, as well as the development of e-commerce, have a great potential for improving intra-African bilateral trade and that the effect of ICT is not unequivocal according to the category of flow considered. However, it emerges from these results that the development of ICT as it is today has not yet succeeded in overturning the argument of physical distance as a barrier to trade in sub-Saharan Africa. The key conclusion is that the establishment of better-quality ICT services and infrastructure is more critical to intra-African trade. African policymakers should accommodate sufficient support to establish the ICT infrastructure and expand ICT penetration by reducing the costs of communication, transactions and access to ICT.