The Role of Telecommunication Infrastructure in the Regional Economic Growth of Africa

Abstract

This paper deals with the effects of telecommunications on the economic growth in African countries. The telecommunications sector became a vital sector during the era of the economic reform that has been characterising the continent. We investigate empirically the role of telecommunication infrastructures on long-run economic growth in African countries, for the span of time from 1984 to 2005. We use the panel data approach with a dynamic fixed effect model, which evidences that telecommunications contribute in a major way to the economic development of the continent. It is a crucial determinant, as findings indicate a significant and positive correlation between telecommunication infrastructures and regional growth in Africa, after controlling for a number of other factors. Results also show that investment in telecommunications is subject to diminishing returns