ICT Diffusion and Economic Growth in Southern African Development Community (SADC) Countries

Technological innovations ensure leapfrogging the development process of emerging and frontier economies with speed and accuracy in economic growth transition. Southern African Development Community (SADC) gains from the increasing inventions of ICT infrastructures, which spurs economic growth in the bloc. The inconclusive assertions in the arguments on ICT-growth nexus motivated this study. It evaluates the causal-effect nexus between ICT and growth in the SADC bloc as a framework for sub-Saharan African countries using panel vector autoregression (PVAR) and generalized method of moments (GMM) approaches. The panel data of sixteen SADC countries from 2000 to 2017 are used for analysis. The study proxied growth with real gross output and ICT diffusion proxied by the index of penetration of fixed-line telephony, mobile telephony and the internet. Other indicators are level of employment as a proxy for employed labor, gross fixed capital formation as a proxy for physical capital stock, secondary school enrolment as a proxy for human capital development, net foreign direct investment as a proxy for technology transfer and trade share as a proxy for trade openness. The Dumitrescu-Hurlin causality test revealed that mutual interactions exist between growth and ICT diffusion in the SADC sub-region. Findings further show that ICT diffusion is statistically meaningful to growth. Since the less spread ICT components are internet, thus there is a need to ensure affordable internet access for research and development to increase growth.