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article · Zenodo (CERN European Organization for Nuclear Research)

DIGITAL ECONOMY DEVELOPMENT, PUBLIC SECTOR TRANSFORMATION, AND SUSTAINABLE DEVELOPMENT: EVIDENCE FROM NIGERIA AND POLICY IMPLICATIONS FOR KANO STATE

2026Open accessBayero University Kano

In plain language

Digital economy growth influences sustainable development in Nigeria primarily through the transformation of the public sector. Analysis of national and international data spanning 2000 to 2024 reveals that expanding the digital economy creates a significant, positive long-run impact on public sector modernisation. In turn, a transformed public sector strongly advances sustainable development. When public sector transformation is accounted for, the direct relationship between digital economy growth and sustainable development becomes statistically non-significant, confirming that public sector reform acts as an essential mediating pathway. Achieving sustainable development outcomes therefore relies on pairing digital infrastructure with administrative modernisation. Recommended priorities include rolling out digital public services, upgrading public workforce skills, expanding broadband, strengthening cybersecurity, introducing electronic revenue systems, and implementing inclusive digital programmes for youth, women, rural populations, and small enterprises.

Key takeaways

  • Public sector transformation mediates the long-run relationship between digital economy expansion and sustainable development in Nigeria.
  • Digital economy growth produces a statistically significant positive effect on public sector modernisation.
  • Transformed public sector operations exert a strong positive influence on overall sustainable development outcomes.
  • Digital infrastructure investment must be paired with public administrative reform to achieve measurable sustainable development.

Why it matters

Digital investment alone does not guarantee sustainable development unless governments simultaneously reform their own administrative systems. Understanding that public sector modernisation acts as the critical bridge helps policymakers and funding organisations focus resources effectively. Prioritising civil service digital capacity, electronic revenue collection, and inclusive digital access ensures that technological adoption translates into broad economic and social progress.

Commercialisation angle

The findings support applied policy design and public-sector technology implementations rather than direct commercial products. The work points to adoption pathways for civic technology vendors, broadband providers, and cybersecurity specialists collaborating with regional authorities such as Kano State. While the research itself is early-stage macroeconomic analysis, the identified priorities in electronic revenue administration and digital public services represent applied public procurement and partnership opportunities.

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Abstract

Digitalization is widely regarded as a catalyst for inclusive growth and improved governance; however, the mechanisms through which it promotes sustainable development in Nigeria remain insufficiently examined. This study examines whether public sector transformation mediates the relationship between digital economy development and sustainable development. Annual data covering 2000–2024 were compiled from national and international databases and analyzed using an autoregressive distributed lag (ARDL) error-correction framework. The results indicate that the development of the digital economy has a positive and statistically significant long-run effect on public sector transformation (β = 0.618, p < .001), whereas public sector transformation positively affects sustainable development (β = 0.767, p < .001). The direct effect of digital economy development was statistically non-significant after the introduction of the mediator, whereas the estimated indirect effect was 0.474, with a 95% confidence interval of 0.224–0.730. The negative and significant error-correction terms indicate convergence toward long-run equilibrium, and the diagnostic tests support the models’ adequacy and stability. The findings indicate that Kano State should combine digital infrastructure investment with public-sector reform. Priorities include digital public services, workforce capacity building, broadband expansion, cybersecurity, electronic revenue administration, and inclusive digital programs for women, young people, rural communities, and small businesses.[1]

Research topics

  • Economic Growth and Development
  • Energy, Environment, Economic Growth
  • ICT Impact and Policies

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DOI: 10.5281/zenodo.21933876

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