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1. Policy Briefs Concise summaries that present research findings and policy recommendations on key economic issues to inform policymakers and stakeholders.2. Research Papers In-depth studies and scholarly articles that explore various aspects of economic theories and empirical research, contributing to academic discourse and understanding.3. Working Papers Preliminary reports on ongoing research that are circulated to encourage discussion and suggestions for revision before final publication.4. Theses and Dissertations: CPP Thesis: Rigorous academic research focused on pertinent policy issues, typically by candidates of the Collaborative PhD Program. CMAP Thesis: Scholarly works by Master's candidates involved in the Collaborative Master's in Economics Program, showcasing original research in the Economics sector. CMAAE Thesis: Advanced research endeavors by Master's students under the Collaborative Master's in Agricultural and Applied Economics, contributing to knowledge in agricultural economics and related fields CMAAE Thesis5. Other Publications A diverse range of documents including, but not limited to, conference papers, book chapters, and research updates that do not fall under the conventional categories.
Recent Submissions
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Gendered Analysis of Households’ Uptake of Agricultural Technology, Production, and Food Consumption in Rural Nigeria
(African Economic Research Consortium, 2024-04-12) Ngozi, Atata Scholastica; Belmondo, Tanankem Voufo; Uchenna, Efobi; Emmanuel, Orkoh
The literature suggests marked gender inequality in the use of agricultural technology despite the availability of evidence that women could be as productive as men when given equal access to agricultural resources. This underscores an urgent need to consider improving women’s access to agricultural technology to ensure sustainable provision of food for all people and particularly those in developing countries. This study addresses two specific objectives: (a) it examines gender differences in households’ use of farm-level technology (herbicide, pesticide, and inorganic fertilizer) and (b) it assesses the impact of the uptake of agricultural technology on farm production and food consumption with particular attention to the gender of the household head. The results of the Three Stage Least Squares (3SLS) regression reveal that households’ uptake of agricultural technology has a significant positive effect on their dietary diversity and food consumption expenditure per capita due to increased farm production. While these results are consistent regardless of the gender of the household head, the extent of effects for female-headed households are almost twice those for male-headed households. Therefore, an essential policy implication of our result is that the government could use input subsidies to address some of the gender gaps with regard to agricultural technology access and use. Such efforts address any entrenched inequalities in women’s access to agricultural production resources and consider other socioeconomic factors such as education and landholding which contribute to gender inequality in agricultural technology uptake.
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Tea Prices and Household Consumption Patterns in Tanzania
(African Economic Research Consortium, 2024-04-12) Nchake, Mamello A.; Mtenga, Threza L.
Tea production is a significant contributor to Tanzania's output and income. The country is a price taker in regional and international tea markets, and this makes it vulnerable to price shocks, which can have a detrimental impact on smallholder farmers, especially those who heavily rely on tea production for their income. This vulnerability is particularly critical for net producers who lack alternative income sources, especially in rural areas. The study uses a panel dataset from the Tanzania National Panel Survey (TNPS), collected over the periods 2008- 2009, 2010-2011 and 2012-2013. The study's main findings indicate that tea price shocks have a strong negative effect on consumption patterns of smallholder farming households in Tanzania. The results also highlight that the impact of price shocks is not uniform across all households. It varies based on factors such as the gender of the household head and the location (rural or urban). The study underscores the importance of government intervention to support households affected by price shocks. Safety net programmes and welfare management initiatives can be vital in assisting these households to cope with economic uncertainties. Moreover, policies that encourage savings and the accumulation of productive assets can serve as a cushion against future shocks. Recognizing the variations in the effects of price volatility among different households, the study suggests the need for policies and strategies that are specifically designed to address the uncertainties in the tea market. This implies a nuanced approach to policies that address the diverse needs and vulnerabilities of tea-producing households.
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Investigating the Gender Wage Gap in the Nigerian Labour Market: A Distributional Approach
(African Economic Research Consortium, 2024-04-12) Nwosu, Emmanuel O.; Orji, Anthony
This study investigates the gender wage gap in Nigeria by extending the focus of the existing literature in two ways. First, we apply an extension of the Oaxaca-Blinder decomposition that relies on recentred influence function (RIF) regressions to analyze the gender wage gap at all points along the wage distribution. Second, we investigate changes in the gender wage gap between 2003/2004 and 2018/2019. The results unambiguously show that there is a significant gender wage gap in favour of men in Nigeria. This gap is statistically significant at all points of the wage distribution. Over time, we find that most of the wage difference is significantly accounted for by the wage structure effect, while the composition effect accounted for the wage gap at the lower end of the wage distribution during 2018/19. We also found a general decline in the gender wage gap along the entire wage distribution. In 2018/19, the gap is bigger at the bottom than at the top of the wage distribution, which is evidence in favour of a sticky floor in the Nigerian labour market. In terms of the contributions of individual covariates, we found that urban residence, unionization, education, public sector employment, and wage employment in agriculture has a significant reducing effect on the wage gap in favour of women. To address the gender wage gap in Nigeria, policy should focus more on ways to improve human capital among women and ensuring women are not segregated in top positions at the workplace.
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Horizontal Equity in the Use of Maternal Health Services in Cameroon
(African Economic Research Consortium, 2024-04-11) Josiane, Saleu Feumeni
An equitable healthcare system should be the health policy goal of all countries. The objective of this study is to measure horizontal equity in the use of maternal health services in Cameroon from 2004 to 2018. Specifically, it aims to determine the level of inequity in assistance during delivery and in the intake of tetanus vaccine from 2004 to 2018. It identifies sources of inequity in assistance during delivery and at the intake of tetanus vaccine. To accomplish this, we used the indirect standardization of health care method and the 2004, 2011, and 2018 Demographic and Health Surveys. The results show that there are significant inequities in wealth, education, region of residence, and in access to the nearest health facilities. Furthermore, sociodemographic and economic inequities are associated with health care utilization inequities. A health policy implementation monitoring team is therefore essential if the observed inequities in the use of maternal health services in Cameroon are to be significantly reduced.
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Financial Inclusion and Resilience to COVID-19 Economic Shocks in Nigeria
(African Economic Research Consortium, 2024-04-11) Adeniran, Adedeji P.; Muthinja, Moses M.
We examine the role of financial inclusion, ownership of bank accounts, and previous use of formal financial saving facilities as a resilience factor in the effect of COVID-19 on households' welfare in Nigeria. Using a novel data set that tracks food security among families in Nigeria before and during COVID-19, we find a negative effect of COVID-19 on welfare. The impact is more severe among male-headed households, those living in the southern region of Nigeria, and lower educated households. We also test how financial inclusion mitigates this effect through a triple difference analysis in which the households that are financially included and in non-agricultural sector are considered as the treatment group. Financial inclusion did not support resilience to shock among non-agricultural homes. Given the magnitude and multisectoral dimension of the COVID-19 shock, financial inclusion was not enough to mitigate the effect. This, therefore, points to a role for stronger government support in a large shock like COVID-19.
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Aid Fragmentation and Development Outcomes in Sub-Saharan African Countries
(African Economic Research Consortium, 2024-04-11) Dedehouanou, Sessinou Erick Abel
This study examined the fragmentation of official development assistance (ODA) in Sub-Saharan African countries and the role played by development outcomes. Initially, it analyzed the fragmentation of aid over the period 2000 to 2019 using the Theil index. On the donor side, it appears that fragmentation of aid from bilateral Development Assistance Committee (DAC) donors and bilateral non-DAC donors has decreased significantly in recent years. In addition, the aid provided by bilateral DAC donors has been less fragmented than that given by non-DAC bilateral donors. Several traditional donors and so-called emerging donors have contributed to the fragmentation of aid in Sub-Saharan African countries. As for aid recipients, the countries of Southern Africa or those belonging to the group of so-called fragile States have suffered less from aid fragmentation than their counterparts in Central, East, and West Africa and those belonging to the group of non-fragile States. We used an instrumental variables method and a panel quantile regression with non-additive fixed effect to assess the effect of the development factors on aid fragmentation. The results obtained validated that the fragmentation of aid can be reduced by better coordination of aid at the sectoral level and above all by internal development factors (structural transformation policies and equity in the use of resources). Indeed, no solution to the fragmentation of aid is possible without the implementation of structural policies to achieve a level of development capable of coordinating the action of donors and equity in the use of resources allowing the satisfaction of the needs of various social groups.
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Conflict and Input Misallocation in the Manufacturing Sector: Evidence from Ethiopia
(African Economic Research Consortium, 2024-04-11) Ayele, Yohannes; Edjigu, Habtamu; Oostendorp, Remco H.
This paper examines the impact of civil conflict on the functioning and accessibility of markets for production inputs and their allocation among manufacturing establishments using the 2014-2018 annual census of Ethiopian manufacturing firms. We exploit the time and spatial variation in conflict intensity at the district (Woreda) level and compare whether production input choices of Ethiopian large and medium manufacturing firms in the same sector differ across districts experiencing differential changes in conflict intensity. We find that conflict-induced distortion results in manufacturing firms substituting domestically produced for imported inputs. As a result, firms in high-conflict districts use a relatively lower value of foreign-produced materials and a relatively higher value of domestically produced ones in production. These distortions are likely among the microeconomic mechanisms through which conflict affects aggregate economic outcomes. Furthermore, we find that conflict intensity induces manufacturing firms to substitute non-production workers (skilled workers) with production workers (unskilled workers). Finally, we estimate the impact of conflict induced input distortions on the output value of manufacturing firms and find that this distortion can account for about 40% of the fall in output value of firms in high-conflict districts.
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An Empirical Analysis of the Interaction between Monetary Policy and Commercial Bank Lending in Nigeria
(African Economic Research Consortium, 2024-04-11) Emekaraonye, Chukwunenye Ferguson; Dick, Emmanuel Ikechukwu; Agu, Chukwuma
Using a recursive structural vector autoregressive model and quarterly data from 1986Q1 to 2019Q4, this study examines the transmission mechanism from monetary policy instruments, specifically the monetary policy rate, base money, and nominal exchange rate, to outcome variables (prices and credit to the private sector) in Nigeria. The data showed structural breaks in 2004Q2, 2009Q3 and 2014Q3, which coincided with the 2004 banking consolidation, the 2009 Sanusi-led regulatory measures and the appointment of Godwin Emefiele as the Governor of the Central Bank of Nigeria in 2014. Accordingly, policy instrument transmission tests were conducted along three scenarios – 2004, 2009 and 2014 – to evaluate the changes that may have been imposed on the policy transmission mechanism by the reforms. Under the 2004 consolidation scenario, the reforms strengthened only the interest rate anchor (monetary policy rate), causing it to be effective in influencing credit to the private sector (CPS). Innovations in other monetary policy instruments led to insignificant responses in the outcome variables. Even base money, which previously impacted both prices and credit to the private sector, became insignificant and ineffective after 2004. Sanusi’s regime did not strengthen the impact of any of the monetary policy instruments on prices and credit to the private sector. Base money, that impacted outcome variables in some periods before 2009, became insignificant thereafter. Similarly, the 2014 development and sectoral support programmes under Emefiele also did not strengthen monetary policy instruments. Overall, the study affirms the position that monetary policy reforms may not always strengthen policy instruments to regulate or influence prices and credit to the private sector, especially when the transmission is indirect.
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Health is Wealth: The Impact of Health Insurance on Multidimensional Poverty in Ethiopia
(African Economic Research Consortium, 2024-04-11) Haile, Kaleab K.
While previous empirical studies extensively examined the determinants of households’ health insurance (HI) uptake, little has been done to evaluate the accompanying impacts on household welfare and poverty incidence. This study bridges the existing gap in literature by examining the impact of HI on multidimensional household poverty. The data comes from the latest wave of the Ethiopia Socio-economic Survey (ESS) collected in 2018/19. The study uses propensity score matching and inverse probability weighted regression adjustment to even out the distribution of observed characteristics across purchasers and non-purchasers of HI. As these methods could not address simultaneity and self-selection biases, the study uses the endogenous switching analysis, which integrates HI uptake and multidimensional household poverty equations, considering the interdependencies among the equations and their relationships with relevant observed household characteristics. The results reveal that households’ uptake of HI significantly reduces their probability of being multidimensionally poor. Moreover, the heterogeneous impact assessments of this study show that the desired impact of HI is more pronounced among male-headed households, households with a majority of adult male members, and households in urban areas. This study sheds light on the role of universal health coverage through HI as a policy instrument in the fight against multidimensional deprivations in the context of sub-Saharan Africa.
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The Effect of Intra African Immigration on Productivity in Africa
(African Economic Research Consortium, 2024-04-11) Gnimassou, Blaise
Contrary to popular belief, many Africans who migrate stays in Africa. In a context of low trade openness between African countries and high differences in the prices of goods and factors, intra-African immigration could theoretically play an important role. This paper aims to study the impact of intra-African immigration on labour productivity in Africa, as well as its macroeconomic and sectoral components. Empirically, I rely on a panel of 187 countries, including 53 African countries, over the period 1990‒2019, and a gravity-based 2SLS approach to deal with endogeneity. The results show that intra-African immigration has a positive, significant, and robust impact on labour productivity in Africa. This impact is greater than the effect of immigration in a global sample, and essentially passes through the improvement in total factor productivity and capital efficiency. While immigration tends to deteriorate capital productivity in the world sample, intra-African immigration improves capital productivity in Africa. Furthermore, the results reveal that the service sector is the one that benefits from the positive effect of intra-African immigration in Africa.
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Optimal Monetary Policy with Inflation, Output and Asset Price Volatility in an Open Economy
(African Economic Research Consortium, 2024-04-11) Wamalwa, Peter
This paper aims to establish optimal response of monetary policy to output, inflation, and asset price volatility in small open economies of Kenya and Ghana. The paper estimates a monetary policy response function for inflation, asset prices, and output volatility developed from a dynamic stochastic general equilibrium model using quarterly data from 2000 to 2018. The analysis shows that monetary policy accord inflation greatest weight compared to output and asset prices. However, there are differences in the sensitivity of monetary policy across the economies, and hence price, output, and welfare outcomes. The prioritization of inflation stifles output growth more in Ghana than in Kenya due to high interest rate. Despite monetary policy prioritizing inflation in Ghana, average inflation is higher compared to Kenya. Results from dynamic optimization show that a consistent intervention in the economy to stabilize inflation, output, nominal exchange rate, and asset prices, achieves higher welfare.
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The Impact of Irrigated Agriculture on Child Nutrition Outcomes in Southern Ghana
(African Economic Research Consortium, 2024-04-11) Okyere, Charles Y.; Usman, Muhammed A.
In this study, we investigated whether irrigated agriculture results in improved child nutrition outcomes among farm households in southern Ghana. Using panel data collected between 2014 and 2015, the results from the inverse probability weighted regression adjustment (IPWRA) estimator suggest that children living with irrigating households have, on average, higher weight-for age and weight-for-height than children residing with non-irrigating households. Males and under-five children gained substantial improvements. Disaggregating irrigation by type, the results indicated that households planting on riverbeds or riverbanks had improved child nutrition. Additionally, children living with households lifting water from water sources had higher height-for-age and weight-for-age. Further analysis of the underlying pathways suggests that an increase in health care financing and improvement in environmental quality rather than decreases in illness incidence may be the crucial channels. Altogether, the findings showed the importance of investments in agricultural development, particularly in small-scale irrigated agriculture technologies, to reduce childhood undernutrition.
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Can Results-Based Financing Help Reduce Wealth-Based Disparities in Maternal and Child Health Outcomes in Zimbabwe?
(African Economic Research Consortium, 2024-04-11) Makate, Marshall; Mahonye, Nyasha
Results-based financing (RBF) programme evaluations in sub-Saharan Africa (SSA) have concentrated on quantifying the impact of such programmes on maternal and child health outcomes, worker satisfaction, and quality of care. Very few studies have considered assessing the effectiveness of these programmes from a distributive perspective. This study uses nationally representative data from the Zimbabwe demographic and health survey complemented with geographic location data. As a first step, the empirical approach quantifies wealth-related inequalities in selected maternal and child health outcomes using concentration indices at the district level. A standard difference-in-difference model complemented by kernel-based propensity score matching was used to consistently estimate the impact of the RBF programme on the equality of maternal and child health outcomes across socioeconomic gradients in Zimbabwe by comparing the changes in concentration indices between 2010 and 2015 in ten districts with RBF and thirty districts without the RBF programme for 12 indicators of access to maternal health care and nine indicators of child health outcomes. The results show that the RBF programme was associated with greater and significant improvements in equity related to several outcomes. These outcomes included: prenatal care use (four or more prenatal care visits), family planning, quality of prenatal care (blood pressure checks, iron tablets, and tetanus toxoid vaccinations), child full immunizations, and treatment for fever occurring in the two weeks before the survey. The RBF programme did not appear to ameliorate wealth-related inequality in terms of child low birth weight, neonatal mortality, stunting, diarrhoea prevalence, treatment for diarrhoea, and fever prevalence. A sensitivity check of the estimates indicate that our results are weakly robust to the consideration of absolute measures of inequality (slope index of inequality and the generalized Gini index). From a policy perspective, the results have important implications for public health policies geared towards improving access to maternal and child health care services in developing countries. Our analysis reveals that RBF programmes do not necessarily eliminate wealth-related inequality in maternal and child health outcomes in Zimbabwe but are certainly a useful complement to equity-enhancing policies in the country.
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The Impact of Women’s Decision-Making Power on the Quality of Life of Children under Five Years of Age in Benin
(African Economic Research Consortium, 2024-04-11) Bénédicte, Atchade Touwédé
Using data from Benin’s Demographic and Health Surveys (DHS, 2018), we examined the impact of the purchasing power of women on the quality of life of children under five years of age. More specifically, the study examined the impact of the decision-making power of the woman on the nutritional status of children and of nutritional status on children’s immunization status, using a Multinomial Logit model with the households as the theoretical models. The results of our study generally show that when the woman is involved in the process of decision making within her household, the nutritional status of children and their immunization status are satisfactory. Variables such as the age of the woman, her level of education, the level of education of the head of the household, the employment status of the head of the household, the main decision maker on the health of the children, the interval between child births, the level of wealth of the household and the sex of the child significantly improve the immunization status of children under the age of five years. However, variables such as the distance from a hospital, giving birth to twins and the order of birth have a negative impact on the immunization status of children. Regarding the nutritional status of children, variables such as the age of the woman, her level of education, the management of the income of the woman, the wealth level of the household, the fact that the child is a girl and the fact that the parents collectively decide on the health of the children lower the probability of the child being malnourished. However, variables such as birth order to the children, the fact that the children are twins and age of the child increase the probability of a child being malnourished. Initiatives and approaches therefore should be undertaken to increase the empowerment of women. The results of this study will have a positive impact on the nutritional status of women. In the short term, these recommendations should have an impact on the scholarly results of children, in the medium term on the labour market, and in the long term on sustained economic growth.
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Analysing the Relationship between Innovation and Productivity: A Case Study of Senegalese Manufacturing Industries
(African Economic Research Consortium, 2024-04-11) Kane, Aboubacry
The objective of this study was to profile innovative companies and to examine the link between innovation and productivity in manufacturing firms in Senegal. It considered the interaction between various forms of innovation. Using a descriptive analysis of variance (ANOVA) approach and multivariate regression, the study found that although Senegal had a satisfactory level of technology adoption, an innovation deficit remained in the industrial sector, notably in research and development (R&D) activities. The study established that larger enterprises and firms that export their products are the most innovative. However, no significant relationship was found between the gender of the manager of the firm and the adoption of various forms of innovation. Furthermore, our results demonstrate that the choice to adopt innovation in an organization is positively related to improved labour productivity. Regarding the other types of innovation, no association was found. Our results suggest the need to develop strategies that integrate innovation in industrial policy to facilitate its adoption. They also suggest the need to undertake regular surveys of innovation in firms to better understand market trends, identify their strengths and weaknesses and facilitate decision making in terms of innovation.
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Magnitude and Determinants of Trade Mis-invoicing in Burundi
(African Economic Research Consortium, 2024-04-11) Ndoricimpa, Arcade
The study examines trade mis-invoicing at both aggregated and disaggregated levels by major trading partners, and by major export and import commodities. Aggregated trade mis-invoicing and disaggregated trade mis-invoicing by major trading partners are computed using DOTS database of the International Monetary Fund (IMF) over the period 1970‒2019. Disaggregated trade mis invoicing by major trading commodities is computed using UN-COMTRADE database over the period 1993‒2019. The study shows that the most occurring practices in trade mis-invoicing are export under-invoicing and import over invoicing. Exports of Burundi to most of its major trading partners are found to 2 Policy Brief No.813 be under-invoiced, while imports of Burundi from its major trading partners are in general over-invoiced. The major trading commodities considered are found to be affected by trade mis-invoicing to a great extent. Moreover, an empirical analysis of the determinants of those two common practices of trade mis-invoicing indicates that financial incentives through tax fraud, civil conflicts, governance, capital account openness, the parallel market premium, and the real exchange rate, are the main determinants of export under-invoicing and import over-invoicing. Drivers of trade mis-invoicing at product level were also analysed for some major export and import commodities. The main product-specific factors of trade mis-invoicing are found to be the parallel market premium, the real exchange rate, governance, and civil conflicts. The study's findings suggest that reducing political instability, having a more open capital account, improving governance, as well as reducing taxes and duties, could be ways to reduce the extent of trade mis-invoicing in Burundi. In addition, more effort is needed in ensuring systematic and transparent reporting of international trade transactions.
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Order Flow-Based Microstructure Analysis of the Spot Exchange Rate in Zambia
(African Economic Research Consortium, 2024-04-11) Phiri, Sydney Chauwa; Chisha, Keegan; Chipili, Jonathan M.
Traditional macroeconomic fundamentals have challenges in explaining nominal exchange rate movements at short horizons partly due to their inability to capture expectations. Using data from the Bank of Zambia, and an order flow-based microstructure model within a vector autoregressive (VAR) framework, this study establishes that order flows in the foreign exchange market in Zambia contain useful information in explaining daily exchange rate movements for the period 2016‒2020. Daily order flows of four out of 18 different customer types are found to contain information content with the interbank, manufacturing, households, as well as wholesale and retail being the most important. Cross-market order flows contain less information to explain daily movements in the kwacha/US dollar exchange rate. The policy lesson from the empirical results point to the central bank paying attention to the demand requirements by the four identified segments of the foreign exchange market that can potentially drive up the exchange rate and generate inflationary pressures.
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The Impact of Agricultural Productivity on Deforestation in Central Africa
(African Economic Research Consortium, 2024-04-11) Bakehe, Novice Patrick
This paper examines the effect of agricultural productivity on the environment, using deforestation as an example. We examined this relationship using a sample of nine countries in Central Africa, with data from the 1990s to 2020. The econometrics results show that an increase in agricultural productivity reduced the rate of deforestation in these countries. This suggests that policies that facilitate the adoption of modern inputs and investment in technology leading to an increase in yields from agriculture could lead to a reduction in the demand for agricultural land.
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Women Empowerment in Agriculture and Child Nutrition Evidence from Ethiopia
(African Economic Research Consortium, 2024-04-11) Tesfay, Gebremeskel Berhane; Abidoye, Babatunde O
Child nutrition is a pressing issue in Ethiopia. Reports show that 28% of child deaths are associated with under-nutrition, where 38.0% of children under five years are stunted, 23.6% underweight, 9.9% are wasting, and anaemia prevalence among under-five children is extremely high at 57.0%. This paper examines the impact of women's empowerment in agriculture on intra-gender nutritional outcomes of children below five years old. We use a two-round survey panel data (baseline in 2013 and midline in 2015) of the Women Empowerment in Agriculture Index (WEAI) collected by IFPRI, Central Statistics Agency of Ethiopia, and Addis Ababa University in the Feed-the-Future and non-Feed-the-Future zones in Ethiopia. The primary objective is to examine whether an empowered woman can influence the household decision for better nutritional outcomes for the household members. The allocation decision is obviously influenced by unobserved individual-specific effects such as child gender preference and community variables. We applied the correlated random effects panel model with instrumental variables method to estimate the impact of women's empowerment in agriculture on children's nutrition outcomes. To identify which empowerment domain has a larger effect on intra-gender child nutritional outcomes, we separately estimate the five disempowerment scores on child nutrition outcomes. Nutrition outcomes, in this case, Weight-for-age z-score (waz06), Length/height-for-age z-score (whz06), Weight-for-length/height z-score (haz06), and Child Dietary Diversity Score on the interaction variable of women empowerment in agriculture and gender dummy indicated dissimilar evidence, implying that women empowerment in agriculture, and gender dummy interacted with women empowerment does not show a gender-biased effect on child nutrition outcomes. Similarly, child nutrition outcomes are improved by programme interventions but with no bias to gender. The five domains of disempowerment score negatively correlate with child nutrition outcomes, yet with no gender-biased effect. Therefore, these results suggest that exerting additional efforts on women's empowerment in agriculture can improve child nutrition outcomes without gender bias.
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Financial Inclusion and Resilience to COVID-19 Economic Shocks in Nigeria
(African Economic Research Consortium, 2024-04-11) Adeniran, Adedeji P.; Muthinja, Moses M.
We examine the role of financial inclusion, ownership of bank accounts, and previous use of formal financial saving facilities as a resilience factor in the effect of COVID-19 on households' welfare in Nigeria. Using a novel data set that tracks food security among families in Nigeria before and during COVID-19, we find a negative effect of COVID-19 on welfare. The impact is more severe among male-headed households, those living in the southern region of Nigeria, and lower educated households. We also test how financial inclusion mitigates this effect through a triple difference analysis in which the households that are financially included and in non-agricultural sector are considered the treatment group. Financial inclusion did not support resilience to shock among non-agricultural homes. Given the magnitude and multisectoral dimension of the COVID-19 shock, financial inclusion was not enough to mitigate the effect. This, therefore, points to a role for stronger government support in a large shock like COVID-19.