Internet Penetration’s Impact on Gross Domestic Product per Capita of African Countries

Abstract

The internet has become an essential part of everyday life and is impacting various aspects of society. One field of interest is how internet usage affects economic growth, particularly in terms of GDP per person. This article aims at highlighting the effect of internet penetration on Africa countries gross domestic product per capita (GDP per capita). To achieve this, we used panel data for African countries over the period 1996 to 2019. The study conducted various statistical tests, such as causal effect, co-integration, and mediation tests, to identify which variables are useful in predicting GDP per capita. The findings show that the internet has a significant impact on the economy of African countries. Findings suggest that internet significantly impacts GDP per capita in African countries, whether evaluating within-effect (over time) or between-effect (across countries at a given time).  In addition, the result reveals that Secure internet servers are fundamental if a country is to rely on the internet to boost its economy. The study highlights the need to invest in internet infrastructure and increase internet penetration to promote economic growth in Africa, due to the importance of the internet in today's world.

Keywords: Internet penetration, GDP per capita, Africa countries, Panel model.

DOI: 10.7176/JESD/14-5-03

Publication date:March 31^st 2023