Mobile Telephony and Economic Growth in Africa

This article analyzes the impact of mobile telephony on economic growth in Africa. It uses panel data on 36 African countries over the period 1995 to 2010, and estimates an econometric model made up of two equations–one expressing output as a function of mobile telephony, and the other, a demand function, reflecting the possibility of a reverse causation from the former to the latter. Given the importance of telecommunication in the development process and the dire state of fixed‐line telephones in Africa, the explosive growth in mobile telephony on the continent could potentially contribute to addressing some of the important challenges it faces today, including the lack of robust economic growth and of poverty alleviation. Employing panel data estimation procedures, this study finds evidence that supports the view that increased mobile penetration contributes to the growth rate of real gross domestic product ( GDP ). However, the increase in mobile telephone use was not found to have been significantly influenced by GDP growth. © 2014 Wiley Periodicals, Inc .