Enhancing Economic Diversification in West Africa: The Transformative Potential of Urbanization and Digitalization

Joshua Afolabi

Chapter Chapter 4 in Proceedings of the Global Conference on Economic Diversification 2024, 2026, pp 77-100 from Springer

Abstract: Abstract The discourse surrounding urbanization and digitalization, and their roles in powering economic diversification merits careful consideration. While urbanization and digitalization have catalyzed structural transformation in developed regions, their impact on economic diversification in developing regions remains underexplored. This paper underscores the effect of digitalization and urbanization on economic diversification and its sub-indexes (trade, revenue, and output diversification). Utilizing data from five West African countries from 2010 to 2022, the paper employs robust analytical methods, such as Panels Corrected Standard Errors and System Generalized Method of Moments. Findings reveal overwhelming evidence that digitalization and urbanization stimulate trade, output and overall economic diversification but have insignificant effects on revenue diversification. Further analyses revealed that output diversification precedes trade and revenue diversification. The findings suggest the urgent need for comprehensive and forward-thinking policies that can harness the transformative potential of urbanization and digitalization to diversify and build a more resilient West African economy.

Keywords: Economic diversification; Digitalization; Urbanization; West Africa (search for similar items in EconPapers)
JEL-codes: O11 O31 O55 R11 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-95-2022-0_4

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DOI: 10.1007/978-981-95-2022-0_4

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