Digital Economy and Poverty Reduction in Africa: The Role of Governance Quality

Abstract

This research explores the relationship between the digital economy and poverty in Africa, with a focus on the role of governance quality. Utilizing data from 37 African countries from 2009 to 2022, the study employs robust statistical techniques, such as Panel-Corrected Standard Errors and Instrumental Variable Two-Stage Least Squares estimation. The results indicate a significant association between the digital economy index and reduced poverty levels. Additionally, the study highlights the necessity of improving governance quality to maximize the positive effects of digital economic initiatives on poverty alleviation. By elucidating these interrelated dynamics, this research seeks to provide actionable policy recommendations tailored to the unique developmental challenges faced by African countries.