Remittances, Financial Inclusion, and Food Insecurity: Evidence From Cameroon

ABSTRACT Food insecurity remains a major challenge in developing countries, particularly in African countries where natural disasters and conflict have increasingly reversed the efforts of many policymakers and development practitioners. Although financial inclusion and remittances have emerged as key drivers of food insecurity, the magnitude of their effects is still debated, questioned, and inconclusive. This paper deepens the empirical analysis of the determinants of food insecurity by considering the simultaneous effects of financial inclusion and remittances in Cameroon, a country where internal conflict has worsened the levels of food insecurity. Based on data extracted from the 2017 Cameroon Finscope Consumer Survey, we used several estimation techniques including the two‐stage least square (2SLS) and heteroscedasticity‐based instrumental variable approach to check for consistency of the results and to minimize the potential bias associated with endogeneity. The empirical findings reveal that improving access to remittances and having access to financial services significantly reduces food insecurity. The effects are higher among those with formal financial services. The results are consistent across the different dimensions of food insecurity and financial inclusion and the methods used. It is therefore imperative for policymakers, especially in developing countries, to advocate for universal access to financial services. It is also important to consider the role of remittances when setting or implementing food security interventions.