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Crossing the Digital Desert in Sub-Saharan Africa: Does Policy Matter?

ABSTRACT

The last decade has seen a rapid growth of Internet access across Africa, although it has not been evenly distributed. It is therefore important for policymakers to ask how policy can bridge this inequality of Internet access. This article addresses the dearth of research assessing the interplay between policy and Internet penetration by identifying Internet penetration-related policy variables and institutional constructs in Sub-Saharan Africa. Based on a literature review and data availability, four variables are suggested: (i) free flow of information; (ii) market concentration; (iii) the activity level of the Universal Service Fund (USF); and (iv) total tax on computer equipment. The results show that only the activity level of the USF and low total tax on computer equipment are significantly positively related to Internet penetration in Sub-Saharan Africa. Free flow of information and market concentration do not show any impact on Internet penetration. The latter could be attributed to underdeveloped competition in most Sub-Saharan countries. We recommend that policymakers promote the policy instrument of Universal Service and USF and consider substituting tax on computer equipment with other tax revenues, and not to blindly trust the market's invisible hand to fix inequality in Internet diffusion.