The African Risk Capacity, ARC, is a groundbreaking project of the African Union designed to improve current responses to drought food security emergencies and to build capacity within AU member states to manage drought risks.
As an African-owned, continental index-based weather risk insurance pool and early response mechanism, ARC offers an African solution to one of the continent's most pressing challenges. By bringing together the concepts of insurance and contingency planning, ARC aims to create a new way of managing weather risk by transferring the burden away from African governments, and their vulnerable populations who depend on government assistance, to international financial markets that can handle the risk much better.
This African-owned, AU-led financial entity will use advanced satellite weather surveillance and software — developed by the UN World Food Programme (WFP) — to estimate and trigger quick-disbursing funds to help African countries hit by severe drought implement effective and timely responses to assist those affected.
Click on the video above for an introduction to the African Risk Capacity project.
Click on the video above to hear Fatima Kassam speak about the African Risk Capacity project.
As currently structured, the international system for responding to natural disasters is neither as timely nor equitable as it could be. Funding is secured on a largely ad hoc basis after disaster strikes. Only then can relief be mobilized toward the people who need it most. In the meantime, lives are lost, assets are depleted, and development gains suffer major setbacks, forcing more people into chronic destitution and food insecurity in the world's least economically developed countries. By linking contingency funding to effective response plans, ARC will help African governments reduce negative impacts of droughts on the lives and livelihoods of the vulnerable, while decreasing reliance on external aid.
Since 1990, there have been 132 recorded droughts in sub-Saharan Africa, including the most recent events seen in the Horn of Africa, but because droughts do not happen in the same year in all parts of the continent, pan-African solidarity in the creation of a disaster risk pool like ARC is financially effective. Pooling risk across the continent could save countries up to 50% in costs related to emergency contingency funds making ARC an attractive financing mechanism in support of African food security.
Upcoming Events
The ARC team based in New York will be conducting a simulation on the benefits of risk pooling on Friday, May 4th from 9 AM — 5 PM EST in the WFP New York Office conference room. If you would like to participate, please contact us.
Africa RiskView
The Africa RiskView (ARV) software serves as the technical engine for ARC. ARV allows decision makers to monitor and analyze drought-related food security risk before and during an agricultural season, as well as define ARC participation criteria in terms of the size and frequency of ARC payouts. Click here to learn more.
ARC is currently being designed to cover risks related to severe droughts, though coverage for other risks, such as flood, is planned for the future. The ARC design phase is managed by the United Nations World Food Programme on behalf of the African Union.