Digitalization in MENA and Sub-Saharan Africa: A Comparative Analysis of Mobile Internet Uptake and Use in Sub-Saharan Africa and MENA Countries

Izak Atiyas () and Mark Dutz ()
Additional contact information
Izak Atiyas: Sabanci University
Mark Dutz: The World Bank

No 1549, Working Papers from Economic Research Forum

Abstract: This paper focuses on uptake and use of mobile internet-enabled smartphones as a key access technology enabling benefits from digitalization. Geographically, the paper focuses on three regions of the African continent and the Middle East, namely sub-Saharan Africa (SSA), North Africa (NAfr) and non-rich Middle East (NRME) countries. The paper documents positive causal impacts of internet availability on the probability of employment, labor force participation, and falling poverty rates. The paper provides the following new findings. First, the main constraint to the benefits arising from broader digitalization lies not in internet coverage but in too little uptake and use of internet and the range of productive technologies that are enabled by internet. The paper finds that SSA, followed by NRME, South Asia and NAfr regions have the highest uptake gaps in the world, namely the highest percentage of their populations that have no internet use even though they are covered by at least a 3G network. Second, on the demand side, the most important conditional correlates of low uptake and use include low affordability as reflected in low incomes, high data prices and higher income inequality, low capabilities as reflected in low levels of education and skills, low levels of other complementary assets (especially electricity), and low attractiveness as reflected in low perceptions of useful content. The paper finds evidence of a significant positive correlation between lower uptake and lower incomes, lower capabilities, and lower access to electricity. Third, on the supply side, given levels of demand, the offered variety, quality, and price of internet and enabled digital services are critically associated with the level of market competition. The level of competition, in turn, depends on the policy and regulatory frameworks that govern the evolution of these markets. The paper finds evidence of a significant negative correlation between uptake and the degree of concentration in the mobile market as well as the key regulatory variable of Mobile Termination Rates (MTRs). Finally, when explored in a joint regression framework that combines selected demand and supply-side variables, quantitatively the most important variable associated with internet uptake is affordability (proxied by GDP per capita), followed by skills and electricity. Regulatory stance also matters: the statistical significance of market concentration and not MTRs suggests that regulatory actions and timing, including how they affect the nature and sequencing of entry may be more important than policies focusing on MTRs.

Pages: 60
Date: 2022-05-20, Revised 2022-05-20
New Economics Papers: this item is included in nep-ara, nep-dev, nep-ict and nep-pay
References: Add references at CitEc
Citations:

Published by The Economic Research Forum (ERF)

Downloads: (external link)
https://erf.org.eg/publications/digitalization-in- ... -and-mena-countries/ (application/pdf)
https://bit.ly/3mqpasb (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:1549

Access Statistics for this paper

More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().