Digital advancement in the East African Community: The impact of information and communications technology on economic growth and energy consumption

Abstract

As the East African Community (EAC) modernizes and grows its digital infrastructure, it is essential to comprehend the influence of information and communications technology (ICT) on productivity and energy consumption to formulate initiatives that foster sustainable growth. Accordingly, this study examines the dynamic interrelations of ICT, economic growth, and energy consumption in the EAC from 1999 to 2021, incorporating panel-corrected standard errors (PCSE) and feasible generalized least squares (FGLS) estimators. The results consistently indicate a positive and statistically significant relationship between digital advancement and economic growth. Remarkably, disaggregated ICT metrics indicate that mobile subscriptions, telephone usage, and internet penetration each positively influence economic development, with internet usage exerting the most significant impact. Conversely, digital advancement possesses significant promise for improving energy efficiency. Telephone usage correlates with decreased energy consumption; however, mobile and internet usage exhibit no notable effect on energy demand. Beyond ICT, the evidence demonstrates that gross capital production lowers energy use and promotes growth. Urbanization significantly raises energy demand, whereas trade openness and labour force expansion are important drivers of economic growth. Based on the findings, it is proposed that EAC should prioritize investment in human capital, energy-efficient technology promotion, ICT infrastructure enhancement, sustainable urbanization management, and trade openness with a focus on sustainability.