Information Communication Technology Infrastructure,Energy And Industrial Growth Of Africa

Industrialization started in the early eighteen century and Western countries recorded successful achievements.Recently in Asia,the new industrialized economies and China similarly achieved astonishing industrialization results.Africa on the other had implemented different industrial policy and strategies though the region is still largely agrarian.This thesis investigates the impact of ICT infrastructures and energy on the industrial growth of Africa.Most previous studies examine the effect of ICT infrastructure on aggregate economic growth.This paper is original and significant in that it investigates the impact of ICT infrastructures and energy consumption on the industry sector value-added growth of Africa.Data are from World Bank Development Indicators,World Bank Governance Indicators and International Telecommunication Union(ITU)databases.We employed a dynamic growth model with a two-step difference GMM estimation method that allows instrumenting the endogenous and not strictly exogenous variables.The regression result shows that fixed telephone(TELE),mobile telephone(MOB),internet(INT),fixed broadband(FBB)and energy use(ENRG)are found to be positive determinants of industrialization.Log-linear specifications with different estimation methods are employed to check the robustness and we confirmed consistent results.To identify whether or not ICT variables and energy have the same or different effect on income level and geographic location category of African counties,fixed effect panel estimation is employed.The results reveal that fixed telephone,internet,fixed broadband,and energy use are significant factors to drive industrialization in the lower-income group of countries.In the lower-middle-income group of countries,mobile telephone and internet are factors that contribute to industrial value added growth.Fixed broadband is a positive variable that determines industry value-added growth in the upper-middle-income category of African countries.Similarly,the fixed effect regression result confirmed that ICT infrastructures differ in effect on the industrialization of geographic locations category of African countries.Fixed telephone and mobile telephone are significant positive factors in improving industry value-added growth in Central Africa,whereas fixed telephones and the internet are determinants in East Africa.Mobile telephones and fixed broadband are factors that upsurge industry value-added growth in North African countries.In West Africa,fixed broadband and energy consumption are factors that improve the industry value added of this sub-region,while none of our interest variables are significant determinants in the South African geographical location category.Comparatively,ICT infrastructure variables have a greater significant impact on the industrialization of the lower-income level of countries and in Central,Eastern,and Northern geographic locations than in the lower-middle-income level,upper-middle-income level,and southern and western geographic location categories of African countries respectively.On the other hand,only in West Africa does energy consumption become significant.Therefore,we can conclude that the impacts of ICT infrastructure and energy use are not the same across geographic location categories and income level categories of African countries.The overall policy implication is that investment to improve the penetration of information communication technology and energy use together with use of automation in production,commerce and governance should be a priority for governments,development partners,and other stakeholders.Pieces of training and a proper system for how to use the internet at the work place have to be put in place to increase the positive impact on industry’s value-added growth in Africa.