Access to ICT helps the very poor, says new research

Access to ICT contributes around 0.5 percent to an annual household income in East Africa, according to new research conducted by the University of the Western Cape, South Africa, suggesting a link between the use of ICT and poverty eradication.

The research was conducted by economist Professor Julian May, director of the Institute for Social Development at the university. May released the results of the study at the Towards Carnegie III event in Cape Town last month.

The study, based in the 20 poorest areas in four East African countries, found that access to social media and ICT contributed positively to household income and played a transformative role. Access to mobile phones, which is on the rise across the continent, was central to this. In Kenya, for example, the number of mobile subscribers now stands at 29.7 million, increasing the penetration of mobile telephony services to 75.4 percent. This is a 17.5 percent growth from the 25.2 million subscribers a year ago.

May’s research showed that by late 2010, Africa exceeded Western Europe in terms of the number of mobile connections. Internet usage on the continent had increased by more than 2,000 percent between 2000 and 2011.

 “The finding is significant because it shows that a mobile phone on its own leads to an increase in income,” May said. “There aren’t many things that cost so little and yet have this result. In the face of many other huge plans like land reform that lead to little measurable change, this study shows that a mobile phone can change lives — we can say now that here is a resource that shows a difference.”

Though May was careful to point out the size of the impact of tech access, he nevertheless said that “the availability of mobile phones is a potentially valuable tool to improve the livelihood of the very poor over the medium term (six to 10 years) and contribute towards their escape from poverty traps”.

May’s research took in 1,600 households, with access to mobile phones seeing the income of the region’s poorest increase, in spite of food price increases and the global economic crisis.

 “Access to ICT buffered people against poverty,” May said. “The gains made as a result of ICT access for the most poor were twice that for the non-poor. As a result there was a steady convergence between the income of the poor and the non-poor. Over a 10-year time horizon the modest additional gains from ICT can be seen to disproportionately benefit the very poor.”

The ways in which mobile phones were used by the poor to increase annual income included developing better communication networks, gaining access to news on jobs and communicating directly with prospective employers. Mobiles also allowed a household to save money on basic costs or easily send money to relatives, using mediums such as M-Pesa.

Posted in: Internet

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