Inter-Country Variations in Digital Technology in Africa
Evidence, Determinants, and Policy Applications
While much attention has been focused on the so-called ‘digital divide’ between Africa and the industrialized world, very scant attention has been devoted to the wide variations in the levels of digitalization of African countries. Whereas countries such as South Africa, Mauritius, Namibia, Botswana, Cape Verde and Seychelles have made substantial progress in digitalizing their economies, others are very far behind the international frontiers of information technology (IT). The digital divide within Africa is made even more exasperating when one realizes that countries with the same socioeconomic characteristics have tended to have differential access to IT. Using five measures of IT, this paper explores and documents the differences in the levels of digitalization of 54 African countries. Based on these indicators, a composite index of digitalization is constructed for each country, and the index is in turn used to rank the countries according to their levels of access to IT. After identifying a benchmark index of IT access, African countries are classified into six groups that reflect different levels of IT access. A multiple regression analysis of a cross-sectional data set for 51 African countries is used to investigate the extent to which the differences in the levels of digitalization of African countries are correlated with economic indicators such as urbanization, the stock of human capital, the rate of economic growth, the flow of foreign direct investment (FDI), and the openness of the economy. Based on the results of the regression analysis and the experiences of the more digitalized countries, the paper proposes policy measures that would help accelerate the digitalization of the continent.