The impact of telecommunication revenue on economic growth: evidence from Ghana

The purpose of this paper is to investigate the long-run impact of telecommunications revenue and telecommunications investment on economic growth of Ghana for the time horizon 1976-2007.

The paper uses the Augmented Dickey Fuller and Phillips Perron unit root test to explore the stationarity property of the variables and the Engle-Granger residual-based test of cointegration to model an appropriate restricted error correction model.

The outcome of the analysis produced mixed results. Telecommunications revenue does not contribute significantly whilst telecommunications investment does.

Policy makers will have to deal with a conundrum; while designing targeted policies that will attract more telecommunication investment in order to maximize the corresponding revenues and the economic growth it brings in its wake, they must at the same time find ways and resources to grow the economy to a point or threshold where revenue from telecommunications can have the much needed impact on their economies.

The study is one of the first that has investigated the line of causality between telecommunication revenue and economic growth unlike previous research that mainly focused on the impact of telecommunication infrastructure on economic development.