No abstract

For more than a decade, key international organizations such as the World Bank, International Monetary Fund, the UN and International Telecommunications Union (ITU) have argued that investment in information communication and telecommunication (ICT) infrastructure is a prerequisite for the development of poor countries. However, dissenting voices of the international development community argue that African governments should focus their attention on building schools, delivering basic health care, electricity and clean water rather than on the building of costly ICT infrastructure with their limited financial resources. In this paper, we present an analysis of the relationships among investments in ICT, Health Care and Education and the human development index on five West African nations. We use a Stepwise regression analysis to help unravel the complex relationships among these variables. Our results provide evidence that complementary investments in ICT, health and education can significantly increase development. Given that developing nations are making considerable investments in healthcare, education and ICT and that there are concerns over the type of investments they should make, our findings are a significant contribution to the literature.

M-PESA, the Kenyan mobile money service, has seen exceptional growth since its introduction in March 2007. Six million customers have registered with the service (see Figure 1), which represents nearly half the customer base of Safaricom, the mobile operator that launched M-PESA. This is a level of penetration in the mobile base that no other mobile phone-based service has achieved, outside of voice and text messaging. The figures for person-to-person (P2P) transfers are equally impressive: over USD 1.6 billion (120 billion Kenyan Shillings [KSh]) worth of such transfers have been made through the M-PESA system. Its agent network has grown in parallel with the customer base, and the service can be accessed at nearly nine thousand retail outlets nationwide, in both urban and rural areas.M-PESA facilitates a variety of financial transactions through the mobile phone. To access its services, individuals must register at an authorized M-PESA retail agent outlet. They then get an individual electronic money account that is managed by Safaricom, which in turn deposits the full value its customers store in M-PESA accounts at a pooled account in a regulated bank. Thus, the issuer of M-PESA accounts is Safaricom, but the value in the accounts is entirely backed by highly liquid deposits at a commercial bank. Customers can use their mobile phones to transfer money to both registered and non-registered users, check their account balance, pay bills, purchase mobile phone credit, and transfer such credit to other users. They can also make deposits and withdraw cash from their M-PESA account by visiting an authorized M-PESA agent.M-PESA is not the only mobile money service to be launched in Africa, but it is the most successful. For example, South Africa's WIZZIT has managed to attract 250,000 customers in more than four years of operation. Neighboring Tanzania launched its own version of M-PESA in April 2008, but it has only recently crossed the 100,000 customer mark. So why has this service grown so rapidly within the Kenyan context?

M-PESA, the Kenyan mobile money service, has seen exceptional growth since its introduction in March 2007. Six million customers have registered with the service (see Figure 1), which represents nearly half the customer base of Safaricom, the mobile operator that launched M-PESA. This is a level of penetration in the mobile base that no other mobile phone-based service has achieved, outside of voice and text messaging. The figures for person-to-person (P2P) transfers are equally impressive: over USD 1.6 billion (120 billion Kenyan Shillings [KSh]) worth of such transfers have been made through the M-PESA system. Its agent network has grown in parallel with the customer base, and the service can be accessed at nearly nine thousand retail outlets nationwide, in both urban and rural areas.M-PESA facilitates a variety of financial transactions through the mobile phone. To access its services, individuals must register at an authorized M-PESA retail agent outlet. They then get an individual electronic money account that is managed by Safaricom, which in turn deposits the full value its customers store in M-PESA accounts at a pooled account in a regulated bank. Thus, the issuer of M-PESA accounts is Safaricom, but the value in the accounts is entirely backed by highly liquid deposits at a commercial bank. Customers can use their mobile phones to transfer money to both registered and non-registered users, check their account balance, pay bills, purchase mobile phone credit, and transfer such credit to other users. They can also make deposits and withdraw cash from their M-PESA account by visiting an authorized M-PESA agent.M-PESA is not the only mobile money service to be launched in Africa, but it is the most successful. For example, South Africa's WIZZIT has managed to attract 250,000 customers in more than four years of operation. Neighboring Tanzania launched its own version of M-PESA in April 2008, but it has only recently crossed the 100,000 customer mark. So why has this service grown so rapidly within the Kenyan context?

High-quality information and communication technology (ICT) infrastructure is essential for developing countries to achieve rapid economic growth. International trade and the structure of the global economy require a level of integration that is achievable only with sophisticated infrastructure. Since the early 1990s, international institutions have been pushing developing nations to deregulate and heavily invest in ICT infrastructure as a strategy for accelerating socioeconomic development. After more than a decade of continued investments, some countries have still not achieved expected outcomes. Recently, the International Telecommunications Union (ITU) has called for empirical research to assess the performance and impact of ICT expansion in developing countries. In this article, we respond to this call by investigating factors affecting the efficiency of ICT expansion in five emerging economies in Latin America. Our findings demonstrate that deregulation is not enough to effect efficient ICT expansion, and we argue that existing conditions (economic factors, human capital, geography, and civil infrastructure factors) must also be considered. We conclude by asserting that policy makers can more easily realize socioeconomic development via ICTs if they consider these conditions while cultivating their technology strategies. C 2009 Wiley Periodicals, Inc.