What Do We Know About Drought, Household Consumption and Seasonality: Evidence Review from Sub-Saharan Africa

There is little discussion, let alone systemic evidence, on how droughts affect seasonal/intra-annual consumption within a drought year and subsequent years. This paper reviews the evidence on whether households can smooth food and non-food consumption and how factors constraining consumption smoothing are experienced in the context of drought, focusing primarily on empirical evidence from Sub-Saharan Africa. Households are unable to smooth consumption for various reasons including income seasonality, imperfect credit markets, incomplete insurance, storage constraints, and liquidity constraints. They reduce non-food consumption to partly smooth food consumption during lean season, and there is an overwhelming amount of evidence that households reduce food consumption to cope with drought. Droughts not only exacerbate seasonality in income and price through crop losses and changes in prices and wages, which are triggered by the initial losses, but also extend the lean season. Access to formal or informal credit markets is further constrained for covariate shocks such as drought. This paper recommends further research into the following areas: i) What is the timing of any reduction in food and non-food consumption in response to drought? ii) How do the patterns and timing of consumption reduction vary by household? What are the characteristics that that make some households more vulnerable to drought? iii) Which type of households can afford to smooth consumption by destabilising assets instead of dangerously reducing consumption and smoothing assets? iv) Does access to internet and telecommunications reduce the incompleteness of informal insurance by facilitating information sharing and reducing transaction costs. The empirics of understanding drought's effects on seasonal consumption are limited by costly and infrequent data. “Big data” and “modern methods of data collection” could be explored and leveraged-either on their own or linked with traditional surveys- to obtain more frequent and disaggregated observations of household consumption.