Enhancing household consumption amid climate change and global uncertainty: Does governance matter? Evidence from African countries

This study aimed to investigate the moderation role of governance in enhancing household consumption in African countries amid climate change and global economic policy uncertainty. The study was based on 34 selected African counties. Data for this study covered 2011–2022. The empirical methodology adopted is the panel corrected standard errors estimation. The finding revealed that in the absence of governance, climate change indicators (CO₂ emissions and precipitation) had positive influence on household consumption while rising temperatures had a negative and statistically significant influence on household consumption. Also, global economic policy uncertainty had a negative influence on household consumption in African countries. The interplay between climate variables, global policy uncertainty and governance were found to influence household consumption in African countries in diverse ways. This paper recommends the enforcement of good governance and stabilization of macroeconomic policies by African countries to mitigate the climate change and global economic policy uncertainty shocks on household consumption. This study examined the moderation role of governance in enhancing household consumption in African countries amid climate change and global economic policy uncertainty. The finding indicates that climate change and global economic policy uncertainty had negative influence on household consumption in African countries. However, the interplay between climate change, global policy uncertainty and governance were found to influence household consumption in African countries in diverse ways. This was undertaken to provide empirical insight on effective institutional quality which can guide policy makers in the design of targeted strategies to enhance household consumption amid climate change and global uncertainties.