Effects of Financial Inclusion and Technological Infrastructure for Inclusive Growth: Addressing Socio-Economic Challenges

The growing socio-economic challenges associated with financial exclusion, digital inequality, and uneven technological transformation have intensified the importance of econometric modelling of inclusive growth across developing African economies. However, limited empirical evidence exists regarding the heterogeneous long-run and short-run effects of financial inclusion and technological infrastructure on inclusive growth in West and Southern Africa using advanced dynamic panel econometrics. The purpose of this study is to quantify the structural effects of financial inclusion and technological infrastructure on inclusive growth and to identify regional asymmetries within the finance-technology-growth nexus. The empirical analysis is based on a balanced panel dataset for 18 West and Southern African countries covering 1986-2024 using World Bank World Development Indicators data on GDP per capita growth, domestic credit, bank branches, mobile subscriptions, internet penetration, and electricity access. The study applies Principal Component Analysis (PCA); panel ARDL modelling using PMG and MG estimators; Pedroni, Kao, and Westerlund cointegration procedures; Pesaran CD diagnostics; heterogeneous Dumitrescu-Hurlin panel causality tests; and LLC, IPS, CADF, and CIPS unit root tests implemented in STATA. The econometric estimations reveal a statistically significant long-run effect of technological infrastructure on inclusive growth, where the composite infrastructure index generated a coefficient of 0.122 (p < 0.01), while electricity access produced a coefficient of 0.0929 (p < 0.05), confirming the structural role of digital and energy infrastructure in inclusive economic expansion. The statistical decomposition further identified substantial regional heterogeneity, as the West African financial inclusion index reached 0.269 (p < 0.01), whereas the technological infrastructure index generated a stronger coefficient of 0.358 (p < 0.01), demonstrating that simultaneous financial and technological deepening considerably accelerates inclusive growth dynamics. Moreover, the country-level estimations revealed mathematically differentiated adjustment mechanisms, where Botswana recorded a technological infrastructure coefficient of 0.342 (p < 0.01), while South Africa demonstrated a positive mobile infrastructure effect of 0.00280, suggesting heterogeneous transmission mechanisms between digital inclusion, financial development, and inclusive growth. The obtained findings substantially strengthen the econometric understanding of socio-economic challenges related to financial and digital inclusion and provide a rigorous analytical foundation for evidence-based regional development and digital transformation policies.