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Effects of Temperature and Rainfall Shocks on Economic Growth in Africa

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  • Odusola, Ayodele
  • Abidoye, Babatunde

Abstract

This paper examines the impact of temperature and rainfall volatility on economic growth in 46 African countries. We employ the Bayesian hierarchical modeling approach which allows us to estimate both country level and Africa-wide impact of climate change and extreme events on economic growth in Africa. Our results show that a 10 Celsius increase in temperature leads to 1.58 percentage points decline in economic growth while temperature shock reduces economic growth by 3.22 percentage points. A 1 percent change or shock in rainfall leads to a 6.7 percent change in economic growth. The impact of temperature changes across the 46 countries ranges from -1.24 percent to -1.82 percent in GDP. There are proximity effects on the impact. To maximize the benefits of economies of scale, the paper suggests combined national, cross countries and continental approaches to climate change adaptation in Africa.

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  • Odusola, Ayodele & Abidoye, Babatunde, 2015. "Effects of Temperature and Rainfall Shocks on Economic Growth in Africa," UNDP Africa Research Discussion Papers 267028, United Nations Development Programme (UNDP).
    • Handle: RePEc:ags:undprp:267028
    DOI: 10.22004/ag.econ.267028
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    1. Khalifa, Sherin & Petri, Svetlana & Henning, Christian H. C. A., 2020. "If climate change can trigger civil conflict, can good policy trigger peace? Empirical evidence from cross-country panel data," Working Papers of Agricultural Policy WP2020-01, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    2. Diagne, Youssoupha Sakrya & Thiam, Dame, 2020. "La résilience de l'économie sénégalaise : Quelles politiques publiques en réponses aux chocs exogènes? [Resillience of the senegalese economy; What policy responses to exogenous shocks?]," MPRA Paper 114018, University Library of Munich, Germany.
    3. Md Mazharul Islam & Majed Alharthi & Md Wahid Murad, 2021. "The effects of carbon emissions, rainfall, temperature, inflation, population, and unemployment on economic growth in Saudi Arabia: An ARDL investigation," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-21, April.
    4. Khalifa, Sherin & Henning, Christian H. C. A., 2020. "Climate change and civil conflict in SSA and MENA: The same phenomena, but different mechanisms?," Working Papers of Agricultural Policy WP2020-03, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    5. Majid Khan & Abdul Rashid, 2022. "(A)symmetry effects of climate changes on economic growth: a panel data analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(4), pages 571-607, December.
    6. Chaitat Jirophat & Pym Manopimoke & Suparit Suwanik, 2022. "The Macroeconomic Effects of Climate Shocks in Thailand," PIER Discussion Papers 188, Puey Ungphakorn Institute for Economic Research.
    7. Siriklao Sangkhaphan & Yang Shu, 2019. "The Effect of Rainfall on Economic Growth in Thailand: A Blessing for Poor Provinces," Economies, MDPI, vol. 8(1), pages 1-17, December.

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