The Role of Digital Trade and Technological Advancements in Shaping Financial Resilience in Sub-Saharan Africa

This study examines how digital trade, technology, and Internet adoption impact financial sustainability across 41 Sub-Saharan African (SSA) countries, using the generalized method of moments (GMM) for precise statistical analysis. It focuses on four major financial indicators: financial development, financial institutions access, financial institutions depth, and financial institutions efficiency indexes. The results indicate that digital trade, technology, and Internet use positively interact to boost financial sustainability in SSA, as measured by the financial development index. In terms of financial institutions access, this study finds that importing ICT goods and non-resident patents improve access, whereas resident patents diminish the benefits of exporting ICT goods. Notably, the combined effect of importing ICT goods and increased Internet usage significantly enhances access to financial institutions in SSA. Regarding financial institutions depth, positive interactions are observed between ICT goods exports and resident patents, highlighting the need for a balanced approach. However, there is a potential trade-off with increasing Internet usage, suggesting the need for a strategy to deepen financial institutions in SSA. Lastly, concerning financial institutions efficiency, positive interactions are particularly noted between ICT goods exports and non-resident patents. Yet, a negative interaction is identified with a potential trade-off between importing ICT goods and increasing Internet usage. Policymakers are advised to consider these complex dynamics when formulating strategies to enhance financial sustainability in SSA.