Structural transformation and sustainable development in sub-Saharan Africa

Abstract

Purpose: The study investigates the link between structural transformation and sustainable development in sub-Saharan Africa. Design/methodology/approach: The study adopts the traditional ordinary least square method and the Driscoll and Kraay covariance matrix estimator to address every form of cross-sectional and temporal dependence in panel data. Findings: The study finds the structural transformation of the SSA economy will engender sustainable development. Specifically, the study finds that knowledge exerts a positive and statistically significant impact on sustainable development in SSA. Similarly, we found that technology (mobile cellular subscription and fixed telephone line subscription) promotes sustainable development. The results also show that all the economic transformation promotes sustainable development in SSA. Further, we also found that economic development and physical capital are important drivers of sustainable development in SSA. However, trade openness does not contribute to sustainable development in SSA. This might be because the combined scale effect in trade outweighs the combined technology and composition effects in SSA. This suggests the technology component in total trade activities in SSA does not promote sustainable development. The study recommends that governments across SSA should invest more in ICT and mobile cellular infrastructure or create an enabling environment that encourages digitization and the development of financial technology in the manufacturing, mining, construction, agriculture and services sectors to enhance green and quality growth for sustainable development in SSA. Originality/value: The study uncovers the role of structural transformation in promoting sustainable development in SSA.