(African Economic Research Consortium, 2022) Mesfin, Hiwot; Ahmed, Musa Hasen
The effects of climate shocks on welfare and households’ coping mechanisms has
been extensively addressed in the literature. However, there is a dearth of evidence
on how climate shocks impacts on fragile societies especially in Africa. Due to this
knowledge gap, in this study, we examine an African context, specifically Somalia in a
postconflict era,to understand householdwelfare through the lens ofthe interactions
between climate shock and financial inclusion.
Our results show that female-headed households are more likely to fall below the
poverty line, have a larger poverty depth, and shift their diet due to
climate shock than male-headed households. Interestingly, we find thatremittances
decrease following climate shock,bothonaverageandforfemale-headedhouseholds,
but suchreductiondoesnothaveasignificantadverseeffectonthehouseholds' coping
ability. Additionally, we find that mobile money improves households’ coping ability.
Policymakers need to consider: 1)the gender variations in climate vulnerability when
designing interventions; 2) further investigating the reasons behind the reduction in
remittances following shocks; and 3) expanding mobile money infrastructure to reap
its benefits of improving coping abilities of the vulnerable.