Effects of the digital economy on economic growth in Africa: the role of human capital

This paper aims to analyze the effect of the interaction between the digital economy and human capital on economic growth in Africa. Using data covering the period 2000 to 2021, we use general method moment system estimation techniques for our analysis. The estimation results show that there is a U-shaped complementarity effect between the digital economy and human capital on economic growth. In general, African countries need to reach at least a human capital index threshold for the digital economy to start having a positive effect on economic growth through the human capital channel. Similarly, at least one digital economy threshold must be reached for human capital to begin to have a favorable effect on economic growth through the digital economy channel. Therefore, African countries must further develop digital infrastructure and train human capital in the creation and proper use of new technologies for inclusive growth.This research contributes to the literature by highlighting the complementary relationship that exists between human capital and the digital economy on economic growth in Africa. The results show that this relationship is U-shaped, pointing to the existence of a digital economy and human capital threshold that African countries need to reach in order to increase the synergistic effect of the digital economy and human capital on economic growth. The digital economy reinforces the effect of human capital on economic growth, just as human capital reinforces the effect of the digital economy on economic growth. These results suggest that, for sustained growth in Africa, human capital needs to be trained in the use and creation of information and communication technologies.