TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgement iv
Table of Contents v
Abstract vi
CHAPTER ONE
1.0
Introduction 1
1.1 Background
to the Study 1
1.2
Statement of the Problem 4
1.3
Research Questions 5
1.4 Objectives of the Study 5
1.5 Research Hypothesis 5
1.6
Justification to the Study 5
1.7 Outline of the Study 6
CHAPTER TWO: Literature Review
2.0
Introduction 7
2.2.1
The concept of Information and
Communication Technology 7
2.3 Theoretical
Framework 8
2.3.1
Theory of Economic Growth 9
2.3.2
Robert Solow Theory of Growth 10
2.3.3
Paul Romer Theory of Economic Growth 10
2.3.4
The Impact of ICT on Sustainable Socio-Economic Growth 12
2.3.5 Impact of
Information and Communication Technology 13
2.3.6
Vocational Opportunities in ICT 13
2.3.7
Economic Benefits of ICT Policies 14
2.4
The
Relationship 14
2.4.1
Social Benefit of ICT Policy 15
2.5 Empirical Review 16
CHAPTER TWO: Research Methodology
3.1
Introduction 18
3.2 Model Specification 18
3.3 Model Estimation 19
3.4
Model Evaluation 19
3.4.1 Apriori Criteria 19
3.4.2 Econometrics Criteria 19
3.4.2.1
Coefficient of determination (R2) 20
3.4.2.2
Adjusted R2 20
3.4.2.3
F-statistics test 20
3.4.2.4
Durbin Watson Test 20
3.4.3
Statistical Criteria (First Order
Test) 20
3.5 Sources
of Data 21
CHAPTER
FOUR: Presentation and Analysis of Results
4.1 Introduction 22
4.2 Presentation
of results 22
4.3 Interpretation and Discussion of Results 23
4.3 The R-squared 24
4.4 Adjusted R-squared 24
4.5 The F-statistic 24
4.6 The Durbin-Watson 24
CHAPTER FIVE: Summary, Conclusion and
Recommendations
5.1 Summary 25
5.2
Conclusions 25
5.3
Recommendations 26
Appendix 1
27
References 28
Abstract
In recent years, progress in
information and communication technology (ICT) has caused many structural
changes such as reorganizing of economics, globalization, and trade extension,
which leads to capital flows and enhancing information availability. Moreover,
ICT plays a significant role in development of each economic sector, especially
during liberalization process. Growth economists predict that economic growth
is driven by investments in ICT. This paper examines the impact of Information
and Communication Technology (ICT) use on economic growth using the ordinary
least square estimator within the framework of a dynamic panel data approach
and applies it to 159 countries over the period 1981 to 2015. The results
indicate that there is a positive relationship between growth rate of real GDP
per capita and ICT use index (as measured major house hold consumption
government expenditure on telecom exchange rate and investment in
telecommunication). I Have found a positive relationship between ICT and ecomic
growth This implies that if these countries seek to
enhance their economic growth, they need to implement specific policies that
facilitate ICT use.
CHAPTER ONE
2.0
INTRODUCTION
This is
the chapter on introduction.It states the background to the study, statement of
problem, research question and objectives. It covers the project hypothesis and
justification as well the outline of the study.
1.1 BACKGROUND TO THE STUDY
Information has always played a very
important part in human life. However, in the mid-20th century, the
role of information increased immeasurably as a result of social progress and
the vigorous development in science and technology. Similarly, Trostnikov
(1970) noted that, rapid expansion of a mass of diversified information is
occurring, which has received the name “information explosion”. As a result,
the need has arisen for a scientific approach to information and for
elucidation of its most characteristic properties which has led to two
principal changes in interpretation of the concept of information. The pace of
change brought by new technologies has had a significant effect on the way
people live, work, and play worldwide.
The world has become a global village with
telecommunication being an indispensabletool in the entire process of
globalization. However, it is not in dispute that Telecommunicationsand
Information technology (IT) play essential roles in this process. This is
obviously whydevelopment in this vital sector over the years has been
phenomenal all over the world. In fact,this is why emerging trends in socio -
economic growth shows high premium being placed onInformation and Communication
Technology (ICT), by nations, organizations and homes.
Nigeria, fortunately, has not been left
out of this race for rapid development in the telecommunication industry.
Unlike in the past, governments consider telecommunications service to be so
vital tonational interest and economic development that it was placed directly
under their control in mostcountries until recently, when deregulation and
competition were introduced (Lee, 2003).
The existing literatures on growth and development
studies have shown that Information and communication technology (ICT) plays
considerable role in the economy of a country. Put differently, one of the
major drivers of economic growth and development is information and
communication technology. Singh (2006) noted that ICT is a powerful tool when used in the
right way as part of overall development strategy. In the same vein, Boating
(2007) opined that ICT may not be a panacea to the world’s problems but it can
be a powerful tool to facilitate and enable affordable solutions to basic human
developmental problems. It is widely accepted by intellectuals that ICT has
become an integral part of the social, economic and political paraphernalia of
social interactions; hence countries all over the world are taking to ICT for
various developmental initiatives (Moghaddamand Khatoon-Abadi 2013; Gnaniah
et.al 2004).
As such, it can be
argued that in the 21 century, the role of ICT in transforming the world into a
better place for all (or at least for many) cannot be overemphasized.In fact, ICT has become the buzz word in
academia, government, business, economy and many other social purview of human
society, especially in the areas of sustainable development. ICT has over the
last decade grown and became the driving force responsible for monumental
changes and innovative development in the world.
Posu (2006) stated that the industrial
revolution in Europe and America have been anchored on the technological
breakthroughs. Similarly, during the late 1999s, Harchaoui (2002) noted that
ICT was the largest contributor to the growth within capital services for both
Canada and the United States of America. Nigeria is the largest economy in
Africa after South Africa and Egypt. Nigeria is also a top oil producer with
population of about 170 million people.
According to the World Bank, Nigeria’s GDP
is 568.51 billion US dollars in 2014 which represents 0.92% of the world
economy. With the return to civil rule in 1999, the Obasanjo led People
Democratic Party government initiated and implemented liberalization policy
particularly of the telecommunication sector of the Nigeria economy.The
policies resulted in the establishments of National Telecommunication policy in
December 2001. The mission statement of the government was to use ICT for
education, creation of wealth, poverty eradication, job creation and global
competitiveness (Posu 2006). The implementation of this policy brought about
the adoption of Global System for Mobile-Communication (GSM) and its related
components in Nigeria. The federal government issued a Global System for Mobile
Communications (GSM) operating license. The telecommunication companies that
got the operating license were: Zain (Econet) wireless and MTN communications,
M-Tel, the NITEL counterpart was given an automatic license while in 2003 Globacom
was granted operating license.
Nigeria is the most
populous country on the African continent, according to the United Nations (UN)
and United Nations Development Program (UNDP) Nigeria. The estimated population
growth rate (average annual percentage) of the country from 2010 to 2015 is
2.5%; its urban growth rate from 2010 to 2015 is estimated at 3.8%; its rural
population growth rate (annual average percentage) from 2010 to 2015 is 1.3%;
its urban population in 2012 was 50.3%; its primary-secondary school gross
enrollment ratios for both male and female per 100 persons in 2012 were 62.0%
and 68.9% respectively; its telephone subscribers per 100 inhabitants in 2011
was 59.0%, while in 2010, it was 55.8%; and its Internet users per 100
inhabitants in 2011 was 28.4%, while in 2010 it was 55.8% UNDP Nigeria, 2012).
The country is approximately
923,768 square kilometers which is equivalent to 356,669 square miles(about the
size of California, United States- US), and the literacy rate is 39%–51% (US
Department of State, Nigeria, 2012; UNDP, Nigeria, 2012). Nigeria is divided into
six geopolitical zones, namely; North-east, North-central, North-west,
South-east, South-south and South-west. The Federal Executive Council approved
the National Information Technology Policy in March 2001 and the implementation
started in April with the establishment of the National Information Technology
Development Agency (NITDA), in charge of the mission to make Nigeria an
ICT-capable country in Africa and a key player in the Information Society,
while using ICT as a catalyst for sustainable development and global
competitiveness (ICT4D Nigeria Annual Report, 2007).
The liberalization of
the country’s telecommunication sector in the year 2001 has led to the
emergence of a Nigerian indigenous mobile telecommunication network, “Globacom”. The company currently provides mobile
telecommunication services in the country and therefore, it is one of the
global GSM operators. From 2001 when the mobile telecommunication services
began a considerable penetration into the country, the progress has been monumental.
The 2013Ministerial Report of Nigeria’s Federal Ministry of Communication
Technology (FMCT), indicates that about 83% of the country’s 166.6 million
people, are active mobile phone subscribers. In 2011 and 2012 it was 68% and
71% respectively. Similarly, the Nigerian Communications Commission (NCC)
indicates that out of the 114.172 million active subscribers on the global
system for mobile telecommunication (GSM) networks in the country, only 34.5
million, which is approximately 39.4%, of them use Internet data and it is
expected to rise to 98% by the year 2015. On Internet accessibility and usage
the statistics are 29% in 2011, 34% in 2012 and 36% in 2013 and it is expected
to rise to 42% in 2015 (NCC, 2013). People get empowered with information, but when
they lack it they often become isolated and ignorant about their rights and
choices. That is to say, there could be lack of the basic knowledge about the
political and developmental processes that shape their lives in society.
Nowadays many people especially the poor and the uneducated more than ever
before can have access to basic ICT services like mobile communication, mobile
banking, online transactions and sending emails to donor agencies and receiving
instant feedback.
1.2 STATEMENT OF THE
PROBLEM
In Nigeria,
provision of public infrastructure is grossly inadequate and poor. Necessary
telecommunication services, as public infrastructure, needed for meaningful
investment are lacking and, where found, are very expensive. Teledensity in
Nigeria is still very low.The introduction of the GSM in Nigeria was to expand
the teledensity in the country and to make telephone services cheaper and
accessible to the common person as it had been introduced in some African
countries like South Africa, Ghana, and Benin Republic among others. GSM is ICT
based telecommunication that can contribute to the growth and development of
any nation. These Telecommunication Networks have created significant effects
on the gross domestic product (GDP) of Nigeria in terms of job creation,
communication linkages, connectivity, security of lives, and reduced transport
costs among other. Past studies on the developing economy have bothered on the
challenges and roles of ICTs on economic growth (Ndukwe, 2003).
Nigeria is
isolated from the global village because it lacks the critical drive strategies
to harness the full potential of ICT for the socio-economic development of the
country.ICT infrastructure in Nigeria is regarded as underdeveloped when
compared with other developing countries like South Africa, Malaysia, Brazil
and South Korea. Nigeria’s Internet penetration was less than 16% in 2012 (www.234next.com2012) while its
Internet broadband penetration per 100household was between 4% and 6%(Nigeria’s
National Broadband Plan,2013)which can be regarded extremely lower compared
with for instance Malaysia’s 10.9% in 2006(UNDP/MDGs Malaysia 2010 Report).
1.3 RESEARCH
QUESTIONS
1. What are the determinants of economic growth
and development?
2. What is the effect of Information and
Communication Technology on Economic Growth in Nigeria?
1.4 OBJECTIVES OF THE STUDY
The general objective
of this study is to ascertain the impact of ICT on Nigeria economic growth and
development. The specific objectives are:
1.
To examine the impact
of Information and Communication Technology on theeconomic growth of Nigeria.
2.
To identify the
determinants of economic growth and Development.
1.5 RESEARCH HYPOTHESIS
Ho: Information and Communication Technology does not have
significant effect on economic growth in Nigeria
Hi : Information and
Communication Technology has significant effect on economic growth in Nigeria
1.6 JUSTIFICATION TO THE STUDY
The
significance of the study is primarily to contribute to the existing knowledge
in the area of information communication technology and economic growth of a
country. It will also be a reference
point for further or future study on topical relevance. The study will offer
new strategies on ways that the Nigerian government and policy makers can tap
on the potentials in information and communication technology. It will reveal
the investment opportunities in ICT and can be adopted by relevant governmental
and non governmental agencies in designing entrepreneurship and empowerment
programmes for the vast majority thereby reducing the level of unemployment in
the country. The finding of the study will be useful to all relevant agencies
of government saddle with the overseeing of the telecommunication sector.
Scholars, students, Economists, Tax, Financial and Development Consultants,
Central Bank of Nigeria, Ministry of Finance and National Budget,
Communication, Information as well as Trade and Investments amongst others are
potential beneficiary of the findings of this study.
1.7 OUTLINE OF THE STUDY
The research comprises of five chapters. Chapter one covers the introduction.
Chapter two focuses the review of relevant literature. Chapter three has the
research methodology. Chapter four covers data presentation and result analysis
and chapter five contains summary, conclusion and recommendations.
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