Climate-induced health shocks, financial inclusion, and poverty dynamics in selected Sub-Saharan African Countries

Abstract

This study examines the dynamic relationships among climate-induced health shocks, financial inclusion, and poverty dynamics in five Sub-Saharan African (SSA) countries which employing annual panel data spanning from 2000 to 2023, sourced from the World Development Indicators. The study adopts the Pooled Mean Group (PMG) estimator within an Autoregressive Distributed Lag (ARDL) panel framework. The results reveal that financial inclusion is found to significantly increase per capita consumption expenditure in the long run, confirming its role as a poverty-reducing mechanism. Thus, malaria incidence exerts a strong and statistically significant negative effect on per capita consumption, accentuating the persistent economic burden of climate-sensitive infectious disease. Particularly, cholera incidence yields no significant effect, consistent with its localised and episodic epidemiological pattern. Domestic health expenditure is positively associated with consumption over the long run, though country-level heterogeneity is pronounced. Ditto for Granger causality results confirm unidirectional causation from malaria burden and health expenditure to poverty levels. The study concludes with the following policy recommendations: as such, effective poverty alleviation in SSA requires simultaneous investment in climate-resilient health systems and inclusive financial services, with particular attention to institutional efficiency and equitable access.