ICT Infrastructure Development and Economic Growth Nexus in Ethiopia: A Spatial Planning Perspective

ICT infrastructure development is crucial for economic growth in Ethiopia, particularly given its role as a developing country with significant spatial disparities. The analysis employs a spatial econometric model to estimate the impact of ICT investments on GDP per capita across different administrative units. Initial findings suggest that increased investment in telecommunications significantly boosts GDP by approximately 2.5% for every $10 million invested, with rural areas benefiting more than urban regions. The study concludes that targeted spatial planning of ICT investments can enhance economic growth and reduce regional disparities in Ethiopia. Policy recommendations include prioritising rural areas for ICT infrastructure development to maximise economic benefits and ensure equitable distribution. Model estimation used $\hat{\theta}=argmin_{\theta}\sum_i\ell(y_i,f_\theta(x_i))+\lambda\lVert\theta\rVert_2^2$, with performance evaluated using out-of-sample error.