Dry Times in Africa

Abstract

While there have been some references in the literature to the potential role of the general decline in rainfall in sub-Saharan African nations on their poor growth performance relative to other developing countries, this avenue remains empirically unexplored. In this paper we use a new cross-country panel climatic data set in an economic growth framework to explore the issue. Our results show that rainfall has been a significant determinant of poor economic growth for Africa, but not for other developing countries. Depending on the benchmark measure of potential rainfall, we estimate that the direct impact under the scenario of no decline in rainfall would have resulted in a reduction of between 13 and 36 per cent of today's gap in African GDP per capita relative to rest of the developing world.