ICT Infrastructure Development and Economic Growth Nexus in Ethiopia
Abstract
ICT infrastructure development in Ethiopia is crucial for economic growth, but its impact remains understudied. The analysis uses a Vector Autoregression (VAR) model with robust standard errors to estimate the causal effect of ICT investments on GDP growth. ICT investments have been found to positively influence GDP by an average annual rate of 2. 5% within the study period, indicating significant economic benefits. The econometric results suggest that enhanced ICT infrastructure can significantly boost Ethiopia's economic output, highlighting its critical role in fostering growth. Government and private sector collaborations are recommended to accelerate ICT investments, thereby enhancing economic performance. ICT Infrastructure, Economic Growth, Vector Autoregression (VAR), GDP Model estimation used =argmin_ᵢ (yᵢ, f_ (xᵢ) ) +₂², with performance evaluated using out-of-sample error.
Key Points
Objective
The study aims to evaluate the relationship between ICT infrastructure development and economic growth in Ethiopia.
Methods
- Utilized a Vector Autoregression (VAR) model with robust standard errors to analyze data.
- Estimated the causal effect of ICT investments on GDP growth.
- Assessed the economic impact of these investments over a specific period.
Results
- ICT investments positively influence GDP growth by 2.5% annually.
- Results suggest a significant boost to Ethiopia's economic output from enhanced ICT infrastructure.
- Collaborations between government and private sectors are recommended for further ICT investments.