When Farming Fails: The Sahel’s Economic Pivot to Enterprise, Wages, and Remittances

In the dry heart of West Africa, where rain-fed agriculture has traditionally dictated the rhythm of life, a new economic transition is quietly unfolding. As climate shocks intensify and the productivity of agriculture remains perilously low, households across Burkina Faso, Mali, Niger, Senegal, and Chad are turning toward diversified livelihoods to bolster resilience and stability. A new technical paper published by the World Bank in 2025, authored by Stephanie Brunelin, Ulrich Zombré, and Majda Benzidia under the Sahel Adaptive Social Protection Program (SASPP), explores this shift in detail. Drawing on rich datasets from the Enquête Harmonisée sur les Conditions de Vie des Ménages (EHCVM), the study underscores the growing role of non-agricultural income sources such as micro-enterprises, wage employment, and remittances in reshaping the economic landscape of the Sahel. The paper was supported by national statistical offices and the World Bank, reflecting a broad collaborative research effort across the region.

Agriculture’s Diminishing Dominance

Despite employing a majority of households, agriculture’s financial contribution to household income is strikingly low. In countries like Burkina Faso and Chad, around 76 percent of households report engagement in agriculture, yet it accounts for only 18 percent and 9 percent of income, respectively. In Senegal, just 5 percent of household income comes from agriculture, highlighting the sector’s declining ability to support basic living standards. These gaps between labor and income have driven families to seek alternatives. Notably, in Senegal, 55 percent of households derive income solely from non-agricultural sources, reflecting the country’s higher level of urbanization and reduced dependence on farming. In Burkina Faso and Niger, a significant share of households now combine agricultural and non-agricultural income, especially during the dry season when farming activities wane. The income gap between poor and non-poor households is also evident: the poor continue to rely heavily on agriculture, while the non-poor are more likely to earn from diversified sources. In female-headed households, remittances and non-agricultural enterprises play an even greater role, perhaps due to women’s weaker access to land and agricultural inputs.

Small Enterprises, Big Hurdles

Non-agricultural household enterprises now account for the largest share of income in Burkina Faso, Chad, and Niger, contributing 45 to 62 percent of household earnings. These businesses are typically small-scale and include food sales, petty trading, tailoring, hairdressing, and handicrafts. Most are run by a single individual and are overwhelmingly informal: very few are registered, keep written financial records, or contribute to social security systems. While more prevalent in urban settings, ownership is widespread even in rural areas. Yet despite their pervasiveness, these enterprises struggle to generate meaningful profits. Over 80 percent earn below the poverty line, and a notable share, particularly in Senegal (26 percent), operate at a loss. Urban businesses typically earn more in absolute terms, but rural businesses may achieve better profit margins due to lower overhead costs. Seasonality remains a major constraint. Many enterprises operate only part of the year due to fluctuating demand, with Burkina Faso seeing as many as 76 percent of businesses affected by seasonal closures. Profit levels tend to rise outside the lean season, particularly in Burkina Faso and Niger, but in countries like Mali, seasonal differences are minimal.

The Uneven Promise of Wage Employment

Wage work provides a relatively stable, albeit limited, income stream in the region. In Senegal, it accounts for 38 percent of total household income, surpassing even small enterprise earnings. Elsewhere, such as Chad and Mali, wage work contributes a smaller but still important share. Men dominate wage employment, accounting for 70 to 80 percent of workers, and the majority of these jobs are based in urban areas. Surprisingly, many wage workers have little or no education, indicating that formal qualifications are not always a prerequisite for employment. Most wage earners work in the service sector, with smaller numbers in industry and agriculture. However, these jobs do not always guarantee decent pay or job security. Underemployment is widespread: in Niger, 47 percent of wage workers log fewer than 35 hours a week, and many are only employed part of the year. Agricultural wage jobs typically offer the lowest pay and often fall below national minimum wage levels, while service sector jobs provide relatively better earnings.

Remittances: The Silent Support System

Remittances form the third major pillar of non-agricultural income. These financial lifelines are especially significant in Senegal, where 62 percent of rural and 70 percent of urban households report receiving remittances. By contrast, Chad and Burkina Faso report much lower remittance inflows. Contrary to common narratives of international migration, most remittances are domestic or regional, often sent by siblings or children living in other parts of the same country. In Senegal, for example, 46 percent of households receive remittances from a different region, while 24 percent receive them from within the same city. The senders are predominantly male, and the money is primarily used for daily household needs, food, housing, and utilities, rather than long-term investments or celebrations. While remittances comprise a modest share of total income in most countries, in Senegal, they account for up to 18 percent in rural areas, making them a cornerstone of household survival.

A Call for Inclusive Economic Diversification

The report concludes that while non-agricultural income sources are essential for household resilience, they are no substitute for structural policy interventions. Enterprises are often undercapitalized, poorly managed, and severely constrained by a lack of credit, space, and consumer demand. Wage employment, though relatively stable, remains limited in scope and reach. To truly strengthen livelihoods, governments and development partners must invest in expanding productive inclusion programs, improving financial literacy, easing access to credit, and formalizing informal businesses. Only through such targeted support can diversified income strategies transform from coping mechanisms into genuine vehicles for economic security and upward mobility in the Sahel.