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Do non-farm enterprises improve rural food security? Empirical evidence from Ghana
Abstract
Non-farm enterprises (NFEs) are an essential source of income for rural households in Sub-Saharan Africa, where agricultural risks and income volatility remain prevalent. Using data from 5,871 rural households in Ghana (GLSS 7), this study examines the determinants of NFE participation, estimates its causal impact on household food security, and explores heterogeneity across gender, agro-ecological zones, and inheritance systems. Results indicate that female-headed households, households with higher levels of education, and larger households are more likely to participate in NFEs. In contrast, households in the Savannah Zone are less likely to do so. IPWRA estimates suggest that NFE participation reduces household food insecurity by 0.6 points on the FIES scale (approximately 14–15%). While benefits are broadly similar for male- and female-headed households, they are smaller in agriculturally productive forest zones and among matrilineal households. These findings highlight the potential of NFEs to stabilise rural livelihoods and mitigate food insecurity. Policies that expand access to skills training, credit, and market opportunities, particularly for women, larger households, and those in ecologically vulnerable regions, could increase NFE participation and enhance the resilience and sustainability of rural incomes.
