How Enhancing Information and Communication Technology has affected Inequality in Africa for Sustainable Development: An Empirical Investigation

Asongu, Simplice and Odhiambo, Nicholas (2018): How Enhancing Information and Communication Technology has affected Inequality in Africa for Sustainable Development: An Empirical Investigation. Forthcoming in: Sustainable Development

Abstract

This study examines if enhancing ICT reduces inequality in 48 countries in Africa for the period 2004-2014. Three inequality indictors are used, namely, the: Gini coefficient, Atkinson index and Palma ratio. The adopted ICT indicators include: mobile phone penetration, internet penetration and fixed broadband subscriptions. The empirical evidence is based on the Generalised Method of Moments. Enhancing internet penetration and fixed broadband subscriptions have a net effect on reducing the Gini coefficient and the Atkinson index, whereas increasing mobile phone penetration and internet penetration reduces the Palma ratio. Policy implications are discussed in the light of challenges to Sustainable Development Goals.

• Item Type: MPRA Paper
• Language: English
• Keywords: ICT; Inclusive development; Africa; Sustainable development
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G20 - General; I - Health, Education, and Welfare > I1 - Health > I10 - General; I - Health, Education, and Welfare > I3 - Welfare, Well-Being, and Poverty > I32 - Measurement and Analysis of Poverty; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

References

Abor, J. Y., Amidu, Y., &Issahaku, H., (2018). “Mobile Telephony, Financial Inclusion and Inclusive Growth”, Journal of African Business, 18(4), pp. 430-453.

Abramowitz, M. (1986).“Catching-up, forging ahead or falling behind”, Journal of Economic History, 46(2), pp. 385-406.

Afutu-Kotey, R. L. , Gough, K. W., &Owusu, G., (2017). “Young Entrepreneurs in the Mobile Telephony Sector in Ghana: From Necessities to Aspirations”, Journal of African Business, 18(4), pp. 476-491.

Amavilah, V., Asongu, S. A., & Andrés, A. R., (2017). “Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries”, Technological Forecasting and Social Change, 122 (September), pp. 91-103.

Anyanwu, J.C., (2011).“ International Remittances and Income Inequality in Africa”.African Development Bank Working Paper No. 135, Tunis.

Asongu, S. A., (2013). “How has Mobile Phone Penetration Stimulated Financial Development in Africa?”, Journal of African Business, 14(1), pp. 7-18.

Asongu, S. A., (2015). “The impact of mobile phone penetration on African inequality”, International Journal of Social Economics, 42(8), pp.706-716.

Asongu, S. A., (2016). “Reinventing Foreign Aid for Inclusive and Sustainable Development: Kuznets, Piketty and the Great Policy Reversal”, Journal of Economic Surveys, 30(4),pp. 736–755.

Asongu, S. A., (2017). “Knowledge Economy Gaps, Policy Syndromes and Catch-up Strategies: Fresh South Korean Lessons to Africa”, Journal of the Knowledge Economy, 8(1), pp. 211–253.

Asongu, S. A., (2018). “Comparative sustainable development in sub‐ Saharan Africa”, Sustainable Development. DOI: /abs/10.1002/sd.1733.

Asongu, S. A., & Boateng, A., (2018). “Introduction to Special Issue: Mobile Technologies and Inclusive Development in Africa”, Journal of African Business, 19(3), pp. 297-301.

Asongu S. A. & De Moor, L., (2017). “Financial globalisation dynamic thresholds for financial development: evidence from Africa”, European Journal of Development Research, 29(1), pp. 192–212.

Asongu, S. A., & Kodila-Tedika, O., (2017).“Is Poverty in the African DNA (Gene)?”,South African Journal of Economics, 85(4), pp. 533-552.

Asongu, S. A., & le Roux, S., (2018). “Understanding Sub-Saharan Africa’s Extreme Poverty Tragedy”, International Journal of Public Administration. DOI: 10.1080/01900692.2018.1466900.

Asongu, S. A., le Roux, S., Nwachukwu, J. C., & Pyke, C., (2019a).“The Mobile Phone as an Argument for Good Governance in Sub-Saharan Africa”, Information Technology & People, DOI: 10.1108/ITP-01-2018-0011.

Asongu, S.A, & Nwachukwu, J. C., (2016a). “A brief future of Time in the monopoly of scientific knowledge”. Comparative Economic Studies, 58(4), pp. 638–671.

Asongu, S.A, & Nwachukwu, J. C., (2016b). “The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub Saharan Africa”, World Development, 86(October), pp.133-147.

Asongu, S. A., & Nwachukwu, J. C., (2016c). “The Role of Governance in Mobile Phones for Inclusive Human Development in Sub-Saharan Africa”, Technovation, 55-56 (September-October), pp. 1-13.

Asongu, S.A, & Nwachukwu, J. C., (2016d).“Foreign aid and governance in Africa”, International Review of Applied Economics, 30(1), pp. 69-88.

Asongu, S. A., & Nwachukwu, J. C., (2017).“Quality of Growth Empirics: Comparative Gaps, Benchmarking and Policy Syndromes”, Journal of Policy Modeling, 39(5), pp.861-882.

Asongu, S. A., & Nwachukwu, J. C., (2018a).“Educational quality thresholds in the diffusion of knowledge with mobile phones for inclusive human development in sub-Saharan Africa”, Technological Forecasting and Social Change, 129(April), pp. 164-172.

Asongu, S. A., Nwachukwu, J. C., & Aziz, A., (2018b). “Determinants of Mobile Phone Penetration: Panel Threshold Evidence from Sub-Saharan Africa”, Journal of Global Information Technology Management, 21(2), pp. 81-110.

Asongu, S. A., & Odhiambo, N. M., (2018a).“Basic formal education quality, information technology, and inclusive human development in sub‐Saharan Africa”, Sustainable Development. DOI: 10.1002/sd.1914.

Asongu, S. A., & Odhiambo, N. M., (2018b). “Environmental Degradation and Inclusive Human Development in Sub‐ Saharan Africa”, Sustainable Development, DOI: 10.1002/sd.1858.

Asongu, S. A., Nwachukwu, J. C., & Pyke, C., (2019b). “The Comparative Economics of ICT, Environmental Degradation and Inclusive Human Development in Sub-Saharan Africa”, Social Indicators Research, DOI: 10.1007%2Fs11205-018-2009-x.

Arellano, M., & Bover, O., (1995), “Another look at the instrumental variable estimation of error components models”, Journal of Econometrics, 68(1), pp. 29-52.

Baltagi, B. H., (2008). “Forecasting with panel data”, Journal of Forecasting, 27(2), pp. 153-173.

Bayraktar, N., & Fofack, H., (2018). “A Model for Gender Analysis with Informal Productive and Financial Sectors”, Journal of African Development, 20(2), pp. 1-20.

Beck, T., Demirgüç-Kunt, A., & Levine, R., (2003), “Law and finance: why does legal origin matter?”,Journal of Comparative Economics, 31(4), pp. 653-675.

Bernard, A., & Jones, C. (1996).“Technology and convergence”, The Economic Journal, 106 (437), pp. 1037-1044.

Bicaba, Z., Brixiova, Z., & Ncube, M., (2017). “Can Extreme Poverty in Sub-Saharan Africa be Eliminated by 2030?,” Journal of African Development, 19(2), pp. 93-110.

Boateng, A., Asongu, S. A., Akamavi, R., & Tchamyou, V. S., (2018). “Information Asymmetry and Market Power in the African Banking Industry”, Journal of Multinational Financial Management, 44(March), pp. 69-83.

Bongomin, G. O. C., Ntayi, J. M., Munene J. C., & Malinga, C. A., (2018). “Mobile Money and Financial Inclusion in Sub-Saharan Africa: the Moderating Role of Social Networks”, Journal of African Business,18(4), pp. 361-384.

Chandy, L., Ledlie, N. & Penciakova, V. (2013a). “The Final Countdown: Prospects for Ending Extreme Poverty by 2030”, Brookings Institution Policy Paper No.2013-04, Washington D.C.

De Magalhães, L., & Santaeulàlia-Llopis, R., (2018). “The consumption, income, and wealth of the poorest: An empirical analysis of economic inequality in rural and urban Sub-Saharan Africa for macroeconomists”, Journal of Development Studies, 134(September), pp. 350-371.

Efobi, U. R., Tanaken, B. V., & Asongu, S. A., (2018). “Female Economic Participation with Information and Communication Technology Advancement: Evidence from Sub‐ Saharan Africa”, South African Journal of Economics, 86(2), pp. 231-246.

Elu, J., (2018). “Gender and Science Education in Sub-Saharan Africa-Keynote address at the African Development Bank/African Finance and Economic Association Luncheon, Chicago, January 7, 2017”, Journal of African Development, 20(2), pp. 105-110.

Fisher, J., & Rucki, K., (2017). “Re-conceptualizing the Science of Sustainability: A Dynamical Systems Approach to Understanding the Nexus of Conflict, Development and the Environment”, Sustainable Development, 25(4), pp. 267–275.

Fosu, A. K., (2010a). “Does Inequality Constrain Poverty Reduction Programs? Evidence from Africa”, Journal of Policy Modeling, 32(6), pp. 818-827.

Fosu, A. K., (2010b). “Inequality, Income and Poverty: Comparative Global Evidence”, Social Sciences Quarterly, 91(5), pp. 1432-1446.

Fosu, A. K., (2011). “Growth, Inequality and Poverty Reduction in Developing Countries: Recent Global Evidence”, UNU WIDER Working Paper 2011/01, Helsinki.

Fosu, A., (2013). “Growth of African Economies: Productivity, Policy Syndromes and the Importance of Institutions”, Journal of African Economies, 22(4), pp. 523-551.

Fosu, A. K. (2015). “Growth, Inequality and Poverty in Sub-Saharan Africa: Recent Progress in a Global Context”, Oxford Development Studies, 43(1), pp. 44-59.

Gosavi, A., (2018). “Can mobile money help firms mitigate the problem of access to finance in Eastern sub-Saharan Africa”, Journal of African Business. 18(4), pp. 343-360.

Humbani, M., & Wiese, M., (2018). “A Cashless Society for All: Determining Consumers’ Readiness to Adopt Mobile Payment Services”, Journal of African Business, 18(4), pp. 409-429.

Issahaku, H., Abu, B. M., & Nkegbe, P. K., (2018). “Does the Use of Mobile Phones by Smallholder Maize Farmers Affect Productivity in Ghana?”, Journal of African Business,19(3), pp. 302-322.

Jones, S., & Tarp, F., (2015). “Priorities for Boosting Employment in Sub-Saharan Africa: Evidence for Mozambique”, African Development Review, Supplement: Special Issue on “Aid and Employment”, 27,( S1), pp. 56–70.

Kaulihowa, T., & Adjasi, C., (2018). “FDI and income inequality in Africa”, Oxford Development Studies, 46(2), pp. 250-265.

Kwan, L.Y-Y, & Chiu, C-Y (2015). “Country variations in diiferent innovation outputs: The interactive effect of institutional support and human capital”, Journal of Organisational Behavior, 36(7), pp. 1050-1070.

Love, I., & Zicchino, L., (2006). “Financial Development and Dynamic Investment Behaviour: Evidence from Panel VAR” .The Quarterly Review of Economics and Finance, 46(2), pp. 190-210.

Mannah-Blankson, T., (2018). “Gender Inequality and Access to Microfinance: Evidence from Ghana”, Journal of African Development, 20(2), pp. 21-33.

Meniago, C., & Asongu, S. A., (2018). “Revisiting the finance-inequality nexus in a panel of African countries”, Research in International Business and Finance, 46 (December), pp. 399-419.

Michel, J., (2016). “Beyond Aid: the Integration of Sustainable Development in a Coherent International Agenda”, Centre for International Private Enterprises, http://www.cipe.org/publications/detail/beyond-aid-integration-sustainable-developmentcoherent-international-agenda (Accessed: 19/07/2016).

Minkoua Nzie, J. R., Bidogeza, J. C., &Ngum, N. A., (2018).“Mobile phone use, transaction costs, and price: Evidence from rural vegetable farmers in Cameroon”, Journal of African Business, 19(3), pp. 323-342.

Muthinja, M. M., & Chipeta, C., (2018). “What Drives Financial Innovations in Kenya’s Commercial Banks? An Empirical Study on Firm and Macro-Level Drivers of Branchless Banking”, Journal of African Business, 18(4), pp. 385-408.

Naceur, B.S.,&Zhang, R., (2016). “Financial development, inequality and poverty: some international evidence”. IMF Working Paper, Washington DC.

Ncube, M., Anyanwu, J. C., & Hausken, K., (2014). “Inequality, Economic Growth and Poverty in the Middle East and North Africa (MENA)”, African Development Review, 26(3), pp. 435-453.

Page, J., & Söderbom, M., (2015). “Is Small Beautiful? Small Enterprise, Aid and Employment in Africa”, African Development Review, Supplement: Special Issue on “Aid and Employment”, 27,(S1), pp. 44–55.

Penard, T., Poussing, N., Yebe, G. Z., & Ella, P. N., (2012). “Comparing the Determinants of Internet and Cell Phone Use in Africa : Evidence from Gabon ”, Communications & Strategies, 86(2), pp. 65-83.

Ravallion, M., (2013). “How long will it take to lift one billion people out of poverty?”, The World Bank Research Observer, 28(2), pp. 139-158.

Roodman, D., (2009a). “A Note on the Theme of Too Many Instruments”, Oxford Bulletin of Economics and Statistics, 71(1), pp. 135-158.

Roodman, D., (2009b). “How to do xtabond2: An introduction to difference and system GMM in Stata”, Stata Journal, 9(1), pp. 86-136.

Saifulina, N., & Carballo-Penela, A., (2017).“Promoting Sustainable Development at an Organizational Level: An Analysis of the Drivers of Workplace Environmentally Friendly Behaviour of Employees”, Sustainable Development, 25(4), pp. 299–310.

Shaikh, A.A., & Karjaluoto, H. (2015).“Mobile banking adoption: A literature review”, Telematics and Informatics, 32(1), pp. 129-142.

Smith, M.L., Spence, R., & Rashid, A. (2011).“Mobile phones and expanding human capabilities”, Information Technologies and International Development, 7(3), pp. 77-88.

Sulemana, I., & Kpienbaareh, D., (2018). “An empirical examination of the relationship between income inequality and corruption in Africa”, Economic Analysis and Policy, DOI: 10.1016/j.eap.2018.09.003.

Tchamyou, S. V., (2017). “The Role of Knowledge Economy in African Business”, Journal of the Knowledge Economy, 8(4), pp 1189-1228.

Tchamyou, V. S., (2018a). “Education, Lifelong learning, Inequality and Financial access: Evidence from African countries”. Contemporary Social Science. DOI: 10.1080/21582041.2018.1433314.

Tchamyou, V. S., (2018b).“The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality”. Journal of African Business: Forthcoming.

Tchamyou, V. S., & Asongu, S. A., (2017).“Information Sharing and Financial Sector Development in Africa”, Journal of African Business, 18(7), pp. 24-49.

Tchamyou, V.S., Erreygers, G., & Cassimon, D., (2018). “Inequality, ICT and Financial Access in Africa”, Technological Forecasting and Social Change. DOI: 10.1016/j.techfore.2018.11.004.

Uduji, J.I. & Okolo-Obasi, E. N., (2018a). “Adoption of improved crop varieties by involving farmers in the e-wallet programme in Nigeria”. Journal of Crop Improvement, Journal of Crop Improvement, 32 (5), pp. 717-737.

Uduji, J.I. & Okolo-Obasi, E. N., (2018b). “Young rural women’s participation in the e-wallet programme and usage intensity of modern agricultural inputs in Nigeria”, Gender, Technology and Development, 22(1), pp. 59-81.

Ureta, S. (2008).“Mobilising poverty?: Mobile phone use and everyday spatial mobility among low-income families in Santiago”, Chile, Information Society, 24(2), pp. 83-92.

Wang, E, S-T., & Lin, H-C., (2017). “Sustainable Development: The Effects of Social Normative Beliefs On Environmental Behaviour”, Sustainable Development, 25(6), pp. 595- 609.

Yoshida, N., Uematsu, H., & Sobrado, C. E., (2014). “Is Extreme Poverty Going to End?”,World Bank Policy Research Working Paper No. 6740, Washington D.C.