Are ICT investments paying off in Africa? An analysis of total factor productivity in six West African countries from 1995 to 2002

Abstract

In the past two decades, we have seen increasing debate about information and communication technology (ICT) as an engine of growth that could lift developing nations out of poverty. Many African nations have implemented market liberalization and invested huge sums of money into their ICT sectors. But few studies have been conducted to assess the effectiveness of these investments. Demonstrating ICT sector performance is especially important because of challenges of the development of ICT policy and the United Nations agencies inability to state firmly if there are benefits to these investments. In this article, we investigated the total factor productivity (TFP) of the ICT sectors in six West African countries from 1995 to 2002. While the findings demonstrate positive growth in TFP, there is cause for concern. TFP growth in the ICT sector has been declining, and these countries are not yet able to take advantage of scale efficiencies. Careful attention must be given to future ICT investment strategies and performance management of existing ICT infrastructure if continued growth is to be achieved. © 2008 Wiley Periodicals, Inc.

Keywords:

• IT and development
• total factor productivity
• information economics
• economic performance and development