Analysis of the interactions between information and communication technologies, economic growth, and financial inclusion in WAEMU countries: a simultaneous equations model approach

Abstract

This study examines the impact of information and communication technologies (ICT) on economic growth, with financial inclusion as the main transmission channel. The analysis is based on a panel of seven WAEMU countries covering the period 2006-2023 and uses a simultaneous equation model estimated via the triple least squares (3SLS) method. The empirical results obtained are robust to alternative estimation methods, notably double least squares (2SLS) and two-step generalized method of moments (GMM). They indicate that the spread of ICTs, particularly cell phones and the internet, significantly favors the development of financial inclusion, which constitutes an effective transmission channel for the effects of ICTs on economic growth. Conversely, fixed telephony has no significant effect on financial inclusion, reflecting its marginal contribution to the growth of digital finance. To maximize the impact of ICT on the development of the financial sector in favor of economic growth, several strategic measures are needed. WAEMU countries must prioritize investing in digital infrastructure, particularly in rural and peri-urban areas, to ensure equitable access to mobile telephony and broadband internet. It is also essential to promote the growth of fintechs and mobile financial services, guaranteeing transaction security, data protection and system interoperability. Finally, strengthening financial and digital education is essential to transform access to technology into true financial inclusion.