The Impact of Foreign Direct Investment and Information and Communication Technology on Lesotho's Economic Productivity


  • Ebenezer Megbowon Department of Economics, Faculty of Economics and Finance, Tshwane University of Technology, South Africa
  • Professor Department of Economics, Faculty of Economics and Finance, Tshwane University of Technology, South Africa


FDI, ICT, Economic Productivity, Sustainable Development Goal, Lesotho


Objective: To identify and investigate from a national perspective the variety of factors that could influence the achievement of Sustainable Development Goal with focus of goal 8.2 on economic productivity, the aim of this study is to empirically examine the impact of foreign direct investment and the development of information and communication technology on Lesotho’s economic productivity. Approach: In this study, the stationary analysis is performed by using Phillips–Perron and Augmented Dickey–Fuller unit root tests, Johansen cointegration technique, and vector error correction method for short-run dynamics and causality relationship determination among the studied variables and their respective relative impact on economic productivity in the long-term period. Time series data for the period 1990 to 2021 was utilized to achieve the objectives of this study. Results: Results from suggest that FDI increases economic productivity in Lesotho, whereas ICT reduces. Implication: The result underscores the importance of creating an attractive investment climate and implementing policies to encourage foreign investors. It also suggests a need for re-evaluation of ICT investment strategies and policy interventions tailored to Lesotho's economic landscape. Addressing underlying structural issues or inefficiencies in ICT utilization may require targeted interventions such as enhancing digital literacy, improving technology infrastructure, or fostering a conducive business environment for ICT adoption.

Author Biography

Professor, Department of Economics, Faculty of Economics and Finance, Tshwane University of Technology, South Africa

Professor and Hod of Department.

Department of Economics, Faculty of Economics and Finance,

Tshwane University of Technology, South Africa.



Maciulyte-Sniukiene, A., & Butkus, M. (2020). Impact of information and communication technologies on productivity growth. International Journal of Information Technology and Management, 19(1), 1-18.

Kim, J., Park, J. C., & Komarek, T. (2021). The impact of Mobile ICT on national productivity in developed and developing countries. Information & Management, 58(3), 103442.

Rouleau, G., Gagnon, M. P., & Côté, J. (2015). Impacts of information and communication technologies on nursing care: an overview of systematic reviews (protocol). Systematic reviews, 4, 1-8.

Rathore, M. P. K., Mahesar, M. A., & Rathore, M. H. (2024). Pakistan and Global Economy. Al-NASR, 79-98.

Ayanponle, L. O., Elufioye, O. A., Asuzu, O. F., Ndubuisi, N. L., Awonuga, K. F., & Daraojimba, R. E. (2024). The future of work and human resources: A review of emerging trends and HR's evolving role. International Journal of Science and Research Archive, 11(2), 113-124.

González-Díaz, R. R., Acevedo-Duque, Á., Salazar-Sepúlveda, G., & Castillo, D. (2021). Contributions of subjective well-being and good living to the contemporary development of the notion of sustainable human development. Sustainability, 13(6), 3298.

Olabiyi, J. O. (2022). Decent Employment and Poverty Alleviation for Socio-Economic Development and Its Implications for the Well-Being of the Citizenry in South Africa. APSTRACT: Applied Studies in Agribusiness and Commerce, 16(2), 79-86.

Hickmann, T., Biermann, F., Spinazzola, M., Ballard, C., Bogers, M., Forestier, O., ... & Yunita, A. (2023). Success factors of global goal‐setting for sustainable development: Learning from the Millennium Development Goals. Sustainable Development, 31(3), 1214-1225.

Kanie, N., Griggs, D., Young, O., Waddell, S., Shrivastava, P., Haas, P. M., ... & Kőrösi, C. (2019). Rules to goals: emergence of new governance strategies for sustainable development. Sustainability Science, 14, 1745-1749.

Klaniecki, K., Wuropulos, K., & Hager, C. P. (2019). Behavior Change for Sustainable Development. In Encyclopedia of sustainability in higher education (pp. 85-94). Cham: Springer International Publishing.

Frey, D. F. (2018). Economic growth, full employment and decent work: The means and ends in SDG 8. In The Sustainable Development Goals and Human Rights (pp. 122-142). Routledge.

Frey, D. F., & MacNaughton, G. (2016). A human rights lens on full employment and decent work in the 2030 sustainable development agenda. Sage Open, 6(2), 2158244016649580.

Amador, J., & Silva, C. (2023). The impact of ICT adoption on productivity: Evidence from Portuguese firm-level data (No. w202307).

Daneshmand, A., & Sattarifar, M. (2018). The Effect of Internet Use on Labor Productivity in. Economics Research, 18(68), 75-98.

Lefophane, M. H., & Kalaba, M. (2022). Estimating effects of ICT intensity on productivity, employment and output in South Africa: an industry-level analysis. Information Technology for Development, 28(2), 346-371.

Tisdell, C. (2017). Information technology’s impacts on productivity and welfare: a review. International journal of social economics, 44(3), 400-413.

Wamboye, E., Adekola, A., & Sergi, B. (2016). ICTs and labour productivity growth in sub‐Saharan Africa. International Labour Review, 155(2), 231-252.

Alam, M. S., Miah, M. D., Hammoudeh, S., & Tiwari, A. K. (2018). The nexus between access to electricity and labour productivity in developing countries. Energy policy, 122, 715-726.

International Monetary Fund (IMF) 2003. Glossary of Foreign Direct Investment Terms

Iheonu, C. O., Abia, B., Okwoche, P., & Ifelunini, I. A. (2024). Is FDI from China Good for Labour Productivity in Sub-Saharan Africa? A Panel Cointegration. Foreign Trade Review, 00157325231214047.

Vinh, N. T. (2019). The impact of foreign direct investment, human capital on labour productivity in Vietnam. International Journal of Economics and Finance, 11(5), 97.

Dua, P., & Garg, N. K. (2019). Determinants of labour productivity: Comparison between developing and developed countries of Asia‐Pacific. Pacific Economic Review, 24(5), 686-704.

Nguyen, C. P., Nhi, N. A., Schinckus, C., & Su, T. D. (2021). The influence of foreign direct investment on productivity: an institutional perspective. Review of Development Finance, 11(1), 35-45.

Asada, H. (2020). Effects of foreign direct investment and trade on labor productivity growth in Vietnam. Journal of Risk and Financial Management, 13(9), 204.

Edirisa Nseera (2022) Determinants of Labor Productivity Growth in Eritrea. African Development Bank Group, 1-39.

Elmawazini, K., Saleeby, E. G., Ibn el Farouk, A., & Al-Naser, B. (2018). Tripartite decomposition of labor productivity growth, FDI and human development: evidence from transition economies. Economic Change and Restructuring, 51, 153-171.

Trpeski, P., & Cvetanoska, M. (2018). An empirical investigation of selected factors determining the labour productivity in Macedonia. KNOWLEDGE-International Journal, Vol. 28 (1), 89-95.

Shahnazi, R. (2021). Do information and communications technology spillovers affect labor productivity?. Structural Change and Economic Dynamics, 59, 342-359.

Banday, T. P., & Erdem, E. (2024). ICT and declining labor productivity in OECD. SN Business & Economics, 4(3), 1-19.

Hsieh, E. W. T., & Goel, R. K. (2019). Internet use and labor productivity growth: Recent evidence from the US and other OECD countries. NETNOMICS: Economic Research and Electronic Networking, 20(2), 195-210.

Salim, A., Wen, J., Bello, A. U., Lubis, F. R. A., Khoirudin, R., Khasanah, U., ... & Nasir, M. S. (2024). Does information and communication technology improve labor productivity? Recent evidence from the Southeast Asian emerging economies. Growth and Change, 55(1), e12708.

Relich, M. (2017). The impact of ICT on labor productivity in the EU. Information technology for development, 23(4), 706-722.

Laddha, Y., Tiwari, A., Kasperowicz, R., Bilan, Y., & Streimikiene, D. (2022). Impact of Information Communication Technology on labor productivity: A panel and cross-sectional analysis. Technology in Society, 68, 101878.

Moyo, C., Mishi, S., & Ncwadi, R. (2024). The determinants of labour productivity in the Eastern Cape Province: A sectoral and industry analysis. Development Southern Africa, 1-17.

Soretz, S., Nodehi, M., & Taghvaee, V. M. (2023). Sustainability and sustainable development concepts: Defining the perspectives and pillars.

Ručinská, S., Müller, R., Nauerth, J.A. (2016). Economic Development. In: Marciano, A., Ramello, G. (eds) Encyclopedia of Law and Economics. Springer, New York, NY

Zuvekas, C. (1979). Economic Growth and Economic Development. In: Economic Development. Palgrave, London.

Sinha, N., & Shastri, S. (2023). Does financial development matter for domestic investment? Empirical evidence from India. South Asian Journal of Business Studies, 12(1), 104-126.

Romer P (1986) Increasing returns and long-run growth. J Polit Econ 94:1002–1037

Romer P (1990) Endogenous technological change. J Polit Econ 98:S71–S102

Lucas RE (1988) On the mechanics of economic development. J Monet

Barro RJ (1990) Economic growth in a cross section of countries. Q J Econ 106(2):407–443

Sinha, M., Das, R., & Sengupta, P. P. (2020). FDI, ICT and Economic Growth in Developing Countries: An Empirical Analysis. Role of IT-ITES in Economic Development of Asia: Issues of Growth, Sustainability and Governance, 121-130.

Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94.

Chiemeke, S. C., & Imafidor, O. M. (2020). An assessment of the impact of digital technology adoption on economic growth and labour productivity in Nigeria. NETNOMICS: Economic Research and Electronic Networking, 21(1), 103-128.



How to Cite

Megbowon, E., & Mulatu, Z. (2024). The Impact of Foreign Direct Investment and Information and Communication Technology on Lesotho’s Economic Productivity. Acta Universitatis Danubius. Œconomica, 20(3). Retrieved from



Economic Development, Technological Change, and Growth