By Favour Nnabugwu
The African Risk Capacity Group and the African Development Bank have presented a cheque of $797,049 to the Government of Madagascar as payout for the drought insurance taken by the country under the Africa Disaster Risk Financing Programme (ADRiFi).
The fund is supported by the Governments of the United Kingdom, through the Foreign, Commonwealth and Development Office, and Switzerland, through the Swiss Agency for Development and Corporation, and managed by the African Development Bank (AfDB)
According to the announcement, the ADRiFi programme financed 50% of the 2021-2022 insurance premium for sovereign drought risk transfer for the country.
Delayed rains during the 2021-2022 agricultural season resulted in drought conditions across Madagascar, particularly in the Grand South.
Presented by representatives from the African Risk Capacity Group (ARC) and the African Development Bank, the parametric insurance payout will be used to strengthen the resilience of part of the approximately 1,024,523 people affected by drought
This number was estimated by the Africa RiskView software, a tool used by ARC to estimate the number of people affected by disaster events and the associated response costs, according to the announcement.
The African Development Bank will provide financial support to the Government of Madagascar for the payment of its insurance premium over a period of five years (2019-2023) through the ADRiFi programme.
ARC and the Bank had previously signed a Memorandum of Understanding in March 2017 to support African states to manage disaster risks and to be better prepared to effectively respond to climate-related perils that seriously affect the continent.
Other countries, like Zambia, have also benefited from this initiative. Last month, the Zambian government received a parametric insurance payout of $5.3m via the ADRiFi programme and ARC.
In the case of Madagascar, this is the third insurance payout via the ADRiFi programme and ARC, according to Dr Beth Dunford, African Development Bank’s Vice President for Agriculture, Human and Social Development.
He added: “The combined total of more than $13.5m to boost the government’s ability to provide services that are keeping thousands of vulnerable people from food insecurity or migrating in search of food and work, demonstrates the Bank’s sustained commitment to building African nations’ resilience to climate change.”
Lesley Ndlovu, CEO of ARC Limited, the insurance affiliate of the ARC Agency, said: “Madagascar is, unfortunately, one of the African countries hardest hit by the impact of climate change.
“However, the government’s foresight to take out drought insurance meant that we were able to work together to develop a pre-emptive contingency plan, detailing how the payout would be used. The swift release of funds means the most-affected communities can now be assisted as a matter of urgency.”