Informal savings groups and food security during the COVID-19 pandemic: evidence from Nigeria

Abstract Global food security worsened during the COVID-19 pandemic. In Nigeria, food security indicators increased in the first months of the pandemic and then decreased slightly but never returned to their pre-pandemic levels. We assess if savings groups provided household coping mechanisms during COVID-19 in Nigeria by combining the in-person LSMS-ISA/GHS-2018/19 with four rounds of the Nigerian Longitudinal Phone Survey collected during the first year of the pandemic. A quasi-difference-in-differences analysis setup leveraging the panel nature of the data indicates that savings group membership reduces the likelihood of skipping a meal but finds no statistically significant effect on the likelihood of running out of food or eating fewer kinds of food. Given theoretical priors and other literature positing a relationship, we also implement an OLS regression analysis controlling for baseline values finding that having at least one female household member in a savings group is associated with a 5–15% reduction in the likelihood of reporting skipping meals, running out of food, and eating fewer kinds of food. This analysis is not able to establish causality, however, and may in fact overestimate the effects. Together, the results indicate that savings group membership is positively associated with food security after COVID-19, but the causal effect is statistically significant for only one of the three food security indicators. To conclude, considering the interest in savings groups and expectations of continued food security shocks, the importance of collecting better gender-disaggregated longitudinal household data combined with experimental designs and institutional data on savings groups.