ICT Infrastructure Development and its Impact on Economic Growth in Ethiopia: A Methodological Framework

In recent years, Ethiopia has witnessed significant investments in Information and Communication Technology (ICT) infrastructure aimed at fostering economic growth through improved connectivity and digital services. The methodology employed includes a time-series analysis with a Vector Autoregression (VAR) model, which accounts for potential feedback loops between ICT and GDP. The VAR model will be estimated with robust standard errors to account for uncertainty in the relationships being examined. A preliminary analysis suggests that there is a positive but moderate causal relationship between increased access to ICT infrastructure and economic growth. The econometric framework developed here provides insights into how investments in ICT can be leveraged to enhance economic performance, offering policymakers actionable recommendations for future development strategies. Policymakers are encouraged to prioritise investment in ICT infrastructure that is strategically aligned with sectors critical for growth and efficiency improvements. Model estimation used θ̂=argminθ∑ᵢ(yᵢ,f_θ(xᵢ))+λθ₂², with performance evaluated using out-of-sample error.