The Effect of Internet Access on Output Growth in Somalia: Empirical Evidence from Time Series Data

ABSTRACT

This study examines the effects of Internet access on output growth in Somalia using time series data from 1999 to 2020 and the ARDL approach. The real GDP is the dependent variable, while Internet usage, Export, Import, Investment, and Consumption were explanatory variables. The unit root of the data, cointegration, and the causality between the variables is tested through economic techniques. The findings of this study indicate that internet usage has a long-run positive effect on output growth, as 1 percent increase in internet access leads to a 4.87 percent rise in output growth. Export and Imports positively affect the economy in Somalia and contribute to output growth. This study also found that investment boosts Somalias economic progress while Consumption is a dominant driver of output growth in Somalia. The result is that internet access has a unidirectional relationship with export, Import, investment, and Consumption. This study suggests enhancement of the internet infrastructure to increase Internet penetration, provided that the Internet substantially contributes to Somalias economic growth and promotes a digital economy. Currently, the populations access to the Internet remains restricted in terms of percentage and absolute number.

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