Climate Change and Economic Performance: Empirical Evidence from West African Countries (1994-2025)

This study examines the macroeconomic consequences of climate change in West African countries. The study covered five West African countries: Nigeria, Ghana, Senegal, Mali, and Niger, over the period 1994–2025. The selection of these countries reflects their diverse ecological zones, including both coastal economies (Nigeria, Ghana, Senegal) and Sahelian economies (Mali, Niger). The study integrates multi-source datasets to capture both climatic and economic variables. Using a balanced panel dataset of 160 observations, the analysis integrates climate indicators (temperature anomalies, rainfall variability, floods, droughts, and heat stress) with macroeconomic variables (GDP, agricultural output, population growth, and government expenditure). The study employs panel unit root tests and a Hausman specification test to determine the appropriate estimation method, with results supporting a fixed-effects model that accounts for country-specific heterogeneity. Descriptive evidence indicates persistent warming, with average temperature anomalies of 0.91°C, alongside substantial rainfall variability and frequent extreme events. Correlation analysis shows that GDP is negatively associated with temperature increases, floods, and droughts, but positively related to rainfall and government expenditure. The regression results reveal that a 1°C rise in temperature reduces GDP by approximately USD 4.85 billion, while each additional flood and drought event lowers GDP by USD 2.31 billion and USD 3.18 billion, respectively. Conversely, favorable rainfall anomalies increase GDP, reflecting the agricultural dependence of these economies. Population growth and government expenditure exert significant positive effects, suggesting that demographic expansion and fiscal policy can partially offset climate-related losses. Sectoral estimates confirm that agriculture is highly climate-sensitive, with droughts and temperature increases exerting the largest adverse impacts. Diagnostic and robustness tests validate the consistency of the findings. Overall, the results demonstrate that climate variability and extreme events impose substantial macroeconomic costs in West Africa, underscoring the need for strengthened adaptation policies and fiscal resilience strategies.