Financial Development, Urbanisation, and Food Production in the Economic Community of West African States

This chapter explores the impact of financial development on food production in ECOWAS, emphasising the role of financial systems in enhancing agricultural productivity and food security. Using panel data from 2012 to 2024 and employing Generalised Method of Moments (GMM) and Methods of Moment Quantile Regression (MMQR) techniques, the study examines the effects of credit access, agricultural investment, and financial policies while controlling for the impact of COVID-19. The findings suggest that financial development positively impacts food production by enhancing access to credit, promoting technology adoption, and stimulating investment in infrastructure. However, limited financial inclusion, inadequate rural banking, and economic volatility hinder agricultural growth. Additionally, urbanisation and economic growth create opportunities for food production, while migration and weak governance pose significant obstacles. Robustness checks confirm the validity of the results across different estimation techniques. To ensure sustainable agricultural growth and food security, ECOWAS policymakers must implement targeted financial policies, strengthen governance structures, and improve rural financial access to enhance regional food production.