Communications Towers at the top of Entoto hill, Addis Ababa, Ethiopia. Photo by Eric Lafforgue/Art in All of Us/Corbis via Getty Images

ICT investments on productivity: The example of mobile towers in Ethiopia

Policy brief Firms

  • After experiencing sustained and high economic growth, Ethiopia entered a reform period to realign economic incentives and encourage private sector-driven growth.
  • Investments in the information, communication, and technology (ICT) sector have emerged as one potential engine of future growth and productivity. This includes the construction of mobile towers and giving access to mobile networks.
  • Our findings show how ICT investments relate to substantial positive growth effects. These includes beneficial contributions of mobile coverage towards structural transformation, especially towards jobs associated with a modern, less agrarian economy. There are also positive interaction effects with locations that have all-weather road access.
  • Finally, our evidence suggests there are potential beneficial effects of mobile coverage on market integration, by limiting price gaps and price variability over time.