Abstract

Digital access, education, and digital services have expanded across sub-Saharan Africa, but their conversion into durable productivity gains remains uneven. This study examines whether digital transformation is associated with the formation of an education-dominated knowledge-economy capability and whether that capability is converted into labor productivity, with particular attention to the economic dimension of sustainable development. Using a balanced panel of 609 country-year observations for 29 sub-Saharan African economies during 2002–2022, the analysis combines partial least squares structural equation modeling with fixed-effects models, Mundlak decomposition, first-difference models, System GMM, sensitivity analyses, and rolling-origin forecasting tests. Digital transformation is strongly associated with capability formation, especially its educational component, and the capability composite is positively associated with productivity in the pooled model (β = 0.457). However, the productivity relationship is not consistently corroborated by within-country or dynamic estimates and does not improve out-of-sample forecasts relative to an AR(1) benchmark. The evidence therefore identifies a productivity-conversion gap: connectivity and educational capability expand measured productive potential more clearly than they generate sustained productivity gains. Sustainable development is not measured directly; instead, the results suggest that the economic contribution of digital and knowledge capabilities is likely to depend on complementary firm, financial, energy, institutional, and productive capacities that enable their conversion into durable productive outcomes.

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