Domestic Remittances and Household Food Diversity in Rural Ghana

Abstract

This work investigates the effect of domestic remittances on households' food diversity in rural Ghana using three-stage least squares estimation technique and cross-sectional data from the Ghana Living Standards Survey, round six (GLSS 6). The study finds that Northern Ghana rural households' food diversity scores are lower than their Southern counterparts. Results show that domestic remittances positively affect rural household food diversity in Ghana, and the difference in food diversity index between Northern and Southern rural households narrows as remittances increase. The study also finds that rural households with at least primary educated householders have enhanced food consumption in variety while increasing household size tends to deteriorate food diversity. The study recommends that domestic remittances matter to food consumption diversity, especially in Northern Ghana. Therefore, policymakers should implement remittance tax credits to service providers and strengthen competition in the industry by supporting remittance technologies' interoperability to minimize costs to increase flows. Increased domestic remittance flows to Northern Ghana could narrow the rural household food diversity gap between Northern and Southern Ghana. Farm and non-farm investment and rural sector-specific education investment are also recommended. Contribution/Originality:This study contributes to the existing literature by investigating domestic remittances' impact in narrowing food diversity gap between rural households in Northern and Southern Ghana, controlling for other household characteristics. The study's originality comes from incorporating locational differences in the remittances-food security relationship. INTRODUCTIONAs a lower-middle income economy, Ghana's economic growth over recent years has been, while not outstanding, steady at around or over 4% and top at 8% in 2017, which prompts its poverty reduction. Ghana is the first sub-Saharan African (SSA) country to achieve the first United Nations Millilumen Development Goal (UN-MDG) in reducing extreme poverty by half of its population between 1990 and 2015 (World Bank, 2015). The country successfully reduced its percentage of the population living on less than $1.9 a day from 41.8% in 1987 to 13% in 2016; however, considerable regional income, as well as nutrition and food security disparities remain between Northern and Southern Ghana (USAID, 2018; World Bank, 2017). Despite Ghana's promising growth and living improvements, poverty levels are much higher in rural than in urban areas (McKay, Pirttilä, & Tarp, 2016; World Bank, 2017). In rural Ghana, poverty and food insecurity levels are much higher in Northern Ghana than in the South (GSS, 2018;USAID, 2018). Ghana's nutrition and food security challenge remains a critical developmental issue. Food insecurity, low dietary diversity, lack of feeding