Nexus between digital trade development level and sustainable social development in Sub-Saharan Africa

Abstract

This research explored the relationship between digital trade development and sustainable social development in Sub-Saharan Africa (SSA). We first defined these two concepts and then constructed the Sustainable Social Development Index (SSDI) and the Digital Trade Development Index (DTDI) using the entropy weighting method and panel data of 26 Sub-Saharan African countries from 2000 to 2020. We also analyzed the relationship between these indices using the Granger non-causality test and the instrumental variables two-stage least squares estimation method. Our findings show a statistically significant bidirectional causal relationship between DTDI and SSDI. Moreover, our estimation result shows that a 1% increase in DTDI is linked to a 0.33% improvement in SSDI. This provides evidence of the potential for digital trade to promote sustainable social progress in SSA. The study concludes that improving the financial infrastructure and promoting gender equality are crucial strategies for advancing both digital trade and social sustainability. This research enhances our understanding of the link between economic and social development and offers valuable insights for policymakers in emerging economies.

Keywords

sustainable social development / SDGs / 2030 Agenda / digital trade / Sub-Saharan Africa / Granger causality test / IV-2SLS

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