Nigerian Journal of Banking and Financial Issues (NJBFI)

ASSESSING THE EFFECT OF INFORMATION AND COMMUNICATION TECHNOLOGY EXPENDITURE ON ORGANIZATIONAL EFFICIENCY: A COMPARATIVE STUDY OF SUB-SAHARAN FIRMS

Abstract

This study examines how information and communication technology (ICT) spending affected the efficiency of organizations in Sub-Saharan African businesses. The study used fixed effect regression, panel unit root tests, and descriptive statistics to analyze data from a balanced panel dataset that covered 16 companies between 2013 and 2024. The results showed that the impact of ICT spending on organizational efficiency varies. Software capitalization, software intensity, and ICT fixed asset investment all have substantial negative consequences, indicating inefficiencies brought on by misalignment and underuse of ICT resources. On the other hand, the ratio of ICT expenses to income has a beneficial impact on organizational efficiency, suggesting that flexible and adaptable ICT spending improves operational responsiveness. The study concluded that strategic allocation and efficient use are more important than ICT spending alone, which does not ensure efficiency advantages. By providing firm-level evidence from Sub-Saharan Africa, the findings add to the body of literature on ICT efficiency. To improve efficiency and competitiveness, managers and policymakers are urged to implement adaptable ICT investment strategies, bolster ICT governance, and match technology investments with organizational procedures.