Digital Connectivity and Increase in Labor Productivity: A Case Study of Sub-Saharan African Countries

Digital technologies have experienced a strong expansion in sub-Saharan Africa. This leads to a digital transformation of the economies of this region, which is now one of the places in the world where these technologies have met with great success in terms of their implementation in business settings. Digital connectivity – the ability to adopt and use them efficiently – has greatly improved in recent decades with the arrival of submarine cables in 2009. Sub-Saharan African countries have seen the quality of their internet network improved considerably. In the paper, the effects of digital connectivity on the intra- and inter-industry components of labor productivity growth were analyzed. On a sample of 10 countries in sub-Saharan Africa and over a period of 19 years from 1996–2014, the shift-share method was used to break down productivity growth into its two components. The ordinary least squares technique allowed the authors to make estimates. The results show that digital connectivity can lead to structural change in sub-Saharan Africa by promoting a better reallocation of labor from low productivity sectors to high productivity ones. Therefore, it is recommended that countries accelerate reforms that promote the expansion of digital connectivity.