Digital leapfrogging or digital divide? Internet penetration and structural transformation in Africa

Purpose This study aims to investigate whether digitalization accelerates structural transformation in African economies or reinforces existing structural inequalities. Design/methodology/approach Using panel data on African countries and a rigorous fixed-effects framework, complemented by dynamic System GMM estimation, the analysis provides a direct test of the digital structural transformation hypothesis. Findings The results show a strong and robust positive effect of internet penetration on structural transformation, even after controlling for key macroeconomic and demographic factors. Sectoral evidence reveals a clear mechanism: increased internet access reduces the share of agriculture while significantly expanding the services sector, confirming that digitalization actively reallocates economic activity across sectors. Crucially, interaction results show that the impact of internet penetration is stronger in slower-growing, less advanced economies, providing compelling evidence in favor of the digital leapfrogging hypothesis rather than the digital divide. Originality/value These findings establish digital infrastructure as a central driver of modern structural change and suggest that expanding internet access can serve as a powerful policy tool for accelerating inclusive development in Africa.