As a facility built on pan-African solidarity and led by African governments, strong relationships with and between ARC Member States is the bedrock of ARC’s work.
1. Become ARC Member State
To become an ARC Member State and access the disaster risk management services of African Risk Capacity, African Union Member States must sign the ARC Establishment Treaty. As signatories to the ARC Establishment Treaty, these African governments created and sustain the African Risk Capacity Agency and subsequent facilities, such as the ARC Insurance Company Limited (ARC Ltd).
2. Scoping Mission
To ensure that the African Risk Capacity can make meaningful impact in improving disaster risk management systems in its Member States, a scoping mission is conducted in each country to identify if the African Risk Capacity is an appropriate risk management system for the country and where the African Risk Capacity can add the most value in the optimizing disaster response systems.
When focal ministries are identified, initial technical workshops are kicked off with relevant staff to introduce the ARC Capacity Building Programme and the different elements of disaster risk management that the African Risk Capacity covers.
3. ARC Capacity Building Programme
When ARC Member States determine that the African Risk Capacity can effectively improve disaster risk management systems in their countries, the government and the African Risk Capacity sign a Memorandum of Understanding to formally launch the ARC Capacity Building Programme. The programme is coordinated by the government ministry that has been identified as the best suited to drive the ARC Capacity Building Programme forward, and the African Risk Capacity provides technical guidance to national specialists identified and convened by the government.
Lasting up to 24 months, the ARC Capacity Building Programme strengthens national systems and prepares governments to join the ARC Risk Pool by building their capacities in risk modeling, contingency planning, and risk transfer mechanisms.
Find out more about the ARC Capacity Building Programme.
4. Certificate of Good Standing
Upon completion of the ARC Capacity Building Programme, countries have a customized risk model with Africa RiskView and a national operations plan to mobilize resources quickly when catastrophes strike.
To quality assure the work completed by the country technical working groups, the Africa RiskView customization reports and the national contingency plans are reviewed by various committees. The Africa RiskView customization reports are collectively examined by regional Africa RiskView Customization Review Committees, and national contingency plans are reviewed by the Peer-Review Mechanism using a set of standards and guidelines. The ARC Agency Governing Board then reviews the customization reports and national contingency plans to issue a Certificate of Good Standing based on a set of criteria that was approved by the Conference of Parties.
The Certificate of Good Standing demonstrates that countries have successfully bolstered their disaster risk management systems and have the capacity to use the necessary tools to benefit from joining the ARC Risk Pool.
5. Joining the Risk Pool
Countries that hold a valid Certificate of Good Standing are eligible to participate in the annual ARC risk pool that covers an agricultural season. A risk pool is a mechanism where individual risks are transferred and combined. That pool then takes on the risk profile of the group rather than the risk profile of each individual country, combining the uncertainty of individual risks into a calculable risk for the group. The ARC risk pool enables African countries to secure contingency funds for extreme weather events and natural disasters by capitalising on the natural diversification of weather risk across the continent.
Through the Capacity Building Programme, governments have modeled their risk for a particular hazard and selected risk transfer parameters based on the customised risk index. These parameters determine the amount of risk a country transfers to ARC Ltd, the country’s insurance policy, and the insurance premium. Policies are issued by ARC Ltd and signed by governments to secure participation in the risk pool. Premium payments are received by ARC Ltd to capitalize the risk pool, which will disburse funding if an extreme weather event occurs that season in participating countries.
In the event of an extreme weather event, if countries hold a policy with ARC Ltd that covers the amount of risk transferred, ARC rapidly initiates a process to release funding for early responses. In-season monitoring conducted by countries and ARC enable both parties to identify where the most impacted areas are and the amount of the payout based on estimated impact. With this knowledge, countries develop Final Implementation Plans that elaborate upon the pre-approved Contingency Plans to facilitate targeted interventions that respond quickly and effectively to the populations impacted by disasters.
When the agricultural season finishes and the lean season begins, ARC Ltd disburses payouts the affected countries to launch responses according to the Final Implementation Plan. Funds are received in 2-4 weeks for timely interventions that will deliver assistance to vulnerable households within 120 days.