The Potential of Information and Communication Technologies to Generate International Trade in Africa

Abstract

This article employs the dynamic panel two-step system generalised method of moments (GMM) approach to investigate the effects of information and communication technology (ICT) on trade and economic growth at a multisectoral level in 38 African countries from 1990 to 2019. The study reveals a significant and positive relationship between ICT and the export of agricultural raw materials and services. ICT shows a negative relationship with import in the agricultural sector, and a positive and significant relationship within the manufacturing sector. Additionally, there is no evidence of statistically significant relationships between ICT and service import. In relating ICT to growth, at the sectoral level, significant positive effects on growth were found with a varying magnitude in all sectors. The national ICT recommendation is that governments in African countries should increase investment in the ICT sector of the economy, which will have a remarkable effect on international trade and the economy.