Analysing the impact of climate change on economic growth in the SADC region: a synthetic control approach

Despite its limited role in causing climate change, Africa has been significantly affected by it, particularly in the form of droughts and flooding. Most research on the economic impact of climate change has largely focused on its short-term effects. This study uses panel data covering the period 1980–2018 and the synthetic control method to investigate both short-term and long-term effects of droughts in the Southern African Development Community (SADC) region. The synthetic control method enables us to credibly identify the causal effect of droughts, as it creates a credible counterfactual. Our results show that droughts in the SADC region can be quite devastating. On average, droughts reduced each affected country’s gross domestic product per capita by about 18%, apart from South Africa, where the effect was about 5%. The study results also suggest that the effects of the droughts are long-lasting. Policymakers should therefore consider long-term, rather than short-term, policy responses to droughts.