Development Aid, Information and Communication Technology as Poverty Reduction Mechanisms in Zimbabwe

• Published in: African Journal of Development Studies 2022-05, Vol.2022 (si2), p.101
• Main Authors: Mateko, Freeman Munisi, David, Oladipo Olalekan
• Format: Article
• Language: English
• Subjects: Alleviation; Analysis; Causality; Communications technology; Corruption; Development aid; Economic assistance; Economic growth; Entrepreneurship; Financial institutions; Foreign aid; Governance; Human development; Information communication; Information technology; Political risk; Poverty; Research institutes; Technology application; Time series; Variables; Zimbabwe
• ISSN: 2634-3630; 2634-3649
• DOI: 10.31920/2634-3649/2022/sin1a5

This research aimed to examine the role of development aid and information communication technology in poverty alleviation in Zimbabwe. The slow rate of information communication technology usage in the different sectors of the Zimbabwean economy has exposed many people to high levels of poverty. Other economies in the global village have benefited from the high usage of information and communication technology (ICT) and development aid in poverty alleviation. The unanswered question is why Zimbabwe has failed to reduce poverty levels considering the development aid from the Bretton Woods Institution and other financial institutions? This research seeks to examine how ICT and development aid can be used as tools for poverty reduction. The study used data from World Bank and International Telecommunication Union from 1989 to 2019. An Autoregressive distributed lag model (ARDL) was employed in the research. Time series Granger Causality analysis was used in the research to test the relationship between variables. Empirically, research findings depicted that poor management of foreign aid can increase poverty levels. Apart from that, it was also established that high levels of corruption, bad governance, as well as economic and political instability were the key factors that made foreign aid ineffective in poverty reduction. Low ICT levels can affect a country’s ability to earn higher economic growth outputs. Primary research findings showed that in terms of Granger causality, there was a bi-directional relationship between the variables used in the research. Results from the ARDL revealed a long-run relationship between variables used in the research, which are the human development index, development aid, private domestic credit as well as information and communication technology. In terms of policy recommendation, the paper suggests that the Zimbabwean government must craft sound ICT policies, promote ICT programmes and entrepreneurship as well as channelling development aid to ICT development.