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Report from the Fifth Session of the Conference of Parties (CoP5)

The Conference of Parties is the supreme governing body of the African Risk Capacity (ARC) Agency, consistent of African Union member states that have signed the ARC Establishment Treaty and affirmed their belief in need for a pan-African solution to managing climate risk. The Conference of Parties hold sessions on an annual basis to collectively review the progress of ARC and determine the strategic direction of the agency.

16 ARC member states came together in March 2017 for the fifth session of the Conference of Parties, or CoP5, to adopt the ARC Programme of Work for 2017, elect members of the ARC Agency Governing Board, and review the activities and accomplishments from ARC’s 2015/2016 season

Highlights from CoP5 included:

  • An agreement signed between ARC and African Development Bank to develop a new facility assisting ARC Member States with premium financing and facilitate access to insurance coverage
  • The formation of a subcommittee to address the sustainability of funding sources for ARC insurance premiums;
  • The introduction of ARC’s Outbreak and Epidemic pilot programme, funded by the Rockefeller Foundation, that will develop an insurance product to address financing needs in containing outbreaks of pathogens and diseases common to Africa;
  • Madagascar’s signing of a partnersh
  • The attendance of a farmers’ group, the Network of Peasant Organizations and Producers in West Africa (ROPPA), for the first time to a session of the Conference of Parties

Updates about the activities of ARC, ARC Insurance Company Limited, and the ARC Agency Governing Board, as well as the ARC Programme of Work for 2017 can be found in the complete report from CoP5. Download the full report in English, French, Portuguese, or Arabic.

A tale of two droughts: one killed 260,000 people, the other none. Why?

Assia Sidibe, ARC Head of Goverment Services for West and Central Africa, published a piece in the Guardian illustrating how risk pools and insurance programmes like ARC can save hundreds of thousands of lives, especially as international aid funding grows uncertain and unsustainable. The text is reproduced below. Read the original article on the Guardian.

Drought is a slow and predictable natural disaster. We know it will happen again, and we know much of its effects are preventable if money is invested at the right time. So why do we wait for people to die from hunger induced by droughts before we start calling for emergency relief money?

The UN recently launched a $864m appeal to help 5 million Somalis in dire need of food assistance because of drought. But what if the Somali government could have taken out an insurance policy against such a disaster? They could have responded to their own crisis before a famine claimed lives and far less money would be needed. They would not now in a situation similar to six years ago, when a drought-induced famine killed 260,000 Somalis.

Senegal experienced a significant drought in 2014, but Senegalese children did not starve to death. In fact, there was little international media coverage of the drought because Senegal, Mauritania, Niger, and Kenya led the creation of African Risk Capacity (ARC), a mutual insurance company into which they pooled resources.

Catastrophe risk pools like the ARC have emerged over the last 10 years to protect vulnerable populations and national budgets in case of extreme weather events. And they’re working.

The risk pools use technology to assess losses and trigger payouts earlier than in the traditional response system. To date, 26 countries in Africa, the Caribbean, and Central America have pooled their risks. The Caribbean version, which provides insurance against hurricanes and earthquakes, paid out almost $30m to countries hit by Hurricane Matthew last year.

Meanwhile, in 2015, the ARC paid out more than $26m after lack of rains in the Sahel just south of the Sahara Desert. With that money, Senegal’s government say they distributed food assistance to 750,000 people, and 87,000 livestock herders benefited from the sale of subsidised food for their livestock.

While these insurance payouts can address urgent needs, it cannot replace international assistance in times of severe ongoing drought, such as the one in Somalia. But early cash assistance to families from insurance reduces the overall need for aid.

The International Organization for Migration is now also seeking $24.6m in an emergency aid appeal for Somalia, which is precisely the type of funding that ARC provides.Each dollar invested in ARC before the catastrophe saves $4.40 in the aftermath, according to research from Oxford University.

In Senegal, the response to the 2014 drought was led and funded by the government and targeted the most vulnerable populations, including children under five and lactating mothers. The rapid response meant that we did not see pictures of dying children and cattle on television. Witnessing its effectiveness, more countries have since joined the ARC: Malawi, Gambia, Mali, and Burkina Faso.

And it’s not just responding rapidly with cash that makes a difference in a disaster; countries must think about how that assistance will be deployed. Somalia, given its complex socio-political environment, would not have been able to deploy its assistance in the most efficient way, even if it was part of an insurance scheme. But the government of Somalia could have chosen to deploy any assistance covered by insurance payments through the World Food Programme (WFP) or other partners it has worked with before.

This was the case in Malawi this year. After receiving a $8.1m payout from ARC, the government is considering allocating a portion of the money to a cash transfer activity implemented by the WFP.

Drought insurance is still relatively new to countries in Africa, and Somalia’s government is probably not in a position to pay insurance premiums. But it would have been more cost-effective for Somalia’s donors to cover a $3m ARC insurance premium, instead of committing millions more in emergency aid after the onset of drought.

Risk insurance offers a targeted, effective and sustainable way to address the impacts of climate change or natural disasters and could, over time, reduce the need for ad hoc humanitarian assistance, which has swelled to nearly $25bn internationally. This is simply not sustainable.

Instead, let’s support countries in their efforts to plan ahead and respond through African-owned and led initiatives. Had Somalia been insured, it could have received millions of dollars in immediate aid to combat famine instead of waiting months for international aid to arrive. The cash would have arrived in September and in February, immediately after its two devastating harvest seasons and several months prior to Britain’s decision last month to support the emergency relief response with £100m (much appreciated but a little late).

This cash could have been used to protect the 60% of the country’s livestock that has already died, or help prevent the 110 deaths recorded in just two days in March.

African countries can interrupt the cycle of drought, loss and death by banding together to insure against weather calamities. This translates into lives saved, and offers a new model for economic self-sufficiency.

Tropical Cyclone ENAWO – Post Event Report 14 March 2017

The African Risk Capacity monitors tropical cyclone activity in the South-West Indian Ocean (SWIO) and relies on Africa RiskView, a disaster risk modelling platform that uses satellite-based and other geo-information to forecast wind speed and storm surge height and estimate population affected and economic loss. These modelled losses are the underlying basis of the insurance policies issued by the ARC Insurance Company Limited, the financial affiliate of the ARC Agency, which pools risk across the continent.
Name Event Number Naming Date Last report as a cyclone Countries affected
ENAWO 09 03/03/2017 11/03/2017 Madagascar
  • Windfields & Surge Depth 
  • Population Affected 

The following map shows the wind fields of the tropical cyclone. Note that wind speeds are only recorded if the storm was classified as tropical cyclone (peak wind speed over 35 kts)..

The following map shows the storm surge depth of the tropical cyclone. Note that surge are only recorded if the storm was classified as tropical cyclone (peak wind speed over 35 kts)..

Based on windspeed and surge depth, Africa RiskView calculates the potential number of people affected by the tropical cyclone. The table below shows the number of people affected (by different categories of wind speed).

Location / Category Population affected
MADAGASCAR
ANTANANARIVO
Category 1 (74-95mph) 161359 2.5%
ANTSIRANANA
Category 1 (74-95mph) 827392 49.9%
Category 2 (95-110mph) 510834 30.8%
Category 3 (111-129mph) 187724 11.3%
Category 4 (130-156mph) 7243 0.4%
MAHAJANGA
Category 1 (74-95mph) 591958 24.4%
Category 2 (95-110mph) 159281 6.6%
Category 3 (111-129mph) 17720 0.7%
TOAMASINA
Category 1 (74-95mph) 642351 17.7%
Category 2 (95-110mph) 178395 4.9%
Category 3 (111-129mph) 57023 1.6%

Tropical Cyclone ENAWO – Daily Update 10 March 0000 UTC

The African Risk Capacity monitors tropical cyclone activity in the South-West Indian Ocean (SWIO) and relies on Africa RiskView, a disaster risk modelling platform that uses satellite-based and other geo-information to forecast wind speed and storm surge height and estimate population affected and economic loss. These modelled losses are the underlying basis of the insurance policies issued by the ARC Insurance Company Limited, the financial affiliate of the ARC Agency, which pools risk across the continent.
Name Event Number Naming Date Current Position Current Wind Speed
ENAWO 09 03/03/2017 –27.0S 48.3E 65 km/h
  • Forecasts 
  • Population Affected 

The following maps shows the actual and forecast (dotted line) cyclone track, as well as the forecast peak wind speed at the time of reporting (see map title):

The following map shows the forecast peak surge depth at the time of reporting:

NB: It is important to note that these maps are based on forecasts, which will be updated as soon as the next update on the cyclone track is released.

Based on the forecasts presented under the previous tabs, Africa RiskView calculates the potential number of people affected by the tropical cyclone. The table below shows the number of people affected (by different categories of wind speed). It is important to note that these are forecast-based and thus subject to change as soon as the next update on the cyclone track is released:

Location / Category Population affected
MADAGASCAR
ANTANANARIVO
– Weak Tropical Storm 6,397,113 99.6%
– Strong Tropical Storm 4,330,917 67.4%
– Category 1 (74-95mph) 296,120 4.6%
ANTSIRANANA
– Weak Tropical Storm 1,533,265 92.5%
– Strong Tropical Storm 1,001,133 60.4%
– Category 1 (74-95mph) 858,954 51.8%
– Category 2 (95-110mph) 619,161 37.3%
– Category 3 (111-129mph) 296,813 17.9%
– Category 4 (130-156mph) 17,241 1.0%
FIANARANTSOA
– Weak Tropical Storm 607,139 12.9%
MAHAJANGA
– Weak Tropical Storm 2,265,636 93.2%
– Strong Tropical Storm 1,088,542 44.8%
– Category 1 (74-95mph) 587,625 24.2%
– Category 2 (95-110mph) 176,818 7.3%
– Category 3 (111-129mph) 23,866 1.0%
TOAMASINA
– Weak Tropical Storm 3,280,644 90.3%
– Strong Tropical Storm 1,903,282 52.4%
– Category 1 (74-95mph) 681,050 18.8%
– Category 2 (95-110mph) 188,731 5.2%
– Category 3 (111-129mph) 72,895 2.0%
TOLIARA
– Weak Tropical Storm 215,129 6.9%
– Strong Tropical Storm 72 0.0%

 

Tropical Cyclone ENAWO – Last Update 7 March 1800 UTC

The African Risk Capacity monitors tropical cyclone activity in the South-West Indian Ocean (SWIO) and relies on Africa RiskView, a disaster risk modelling platform that uses satellite-based and other geo-information to forecast wind speed and storm surge height and estimate population affected and economic loss. These modelled losses are the underlying basis of the insurance policies issued by the ARC Insurance Company Limited, the financial affiliate of the ARC Agency, which pools risk across the continent.
Name Event Number Naming Date Current Position Current Wind Speed
ENAWO 09 03/03/2017 -15.2S 49.5E 167 km/h
  • Forecasts 
  • Urban Wind Speed 
  • Population Affected 

The following maps shows the actual and forecast (dotted line) cyclone track, as well as the forecast peak wind speed at the time of reporting (see map title):

The following map shows the forecast peak surge depth at the time of reporting:

NB: It is important to note that these maps are based on forecasts, which will be updated as soon as the next update on the cyclone track is released.

The following graph(s) show the peak wind speed (and surge depth where applicable) for selected locations. The x-axis represents the timeline, which can include both actual and forecast wind speed (and surge depth where applicable):

NB: It is important to note that these graphs are based on forecasts, which will be updated as soon as the next update on the cyclone track is released.

Based on the forecasts presented under the previous tabs, Africa RiskView calculates the potential number of people affected by the tropical cyclone. The table below shows the number of people affected (by different categories of wind speed). It is important to note that these are forecast-based and thus subject to change as soon as the next update on the cyclone track is released:

Location / Category Population affected
MADAGASCAR
ANTANANARIVO
– Weak Tropical Storm 4,354,137 67.8%
– Strong Tropical Storm 51,612 0.8%
ANTSIRANANA
– Weak Tropical Storm 1,493,256 90.0%
– Strong Tropical Storm 990,528 59.7%
– Category 1 (74-95mph) 862,403 52.0%
– Category 2 (95-110mph) 614,050 37.0%
– Category 3 (111-129mph) 284,065 17.1%
– Category 4 (130-156mph) 75,237 4.5%
FIANARANTSOA
– Weak Tropical Storm 208,583 4.4%
MAHAJANGA
– Weak Tropical Storm 1,579,963 65.0%
– Strong Tropical Storm 1,031,919 42.4%
– Category 1 (74-95mph) 601,677 24.7%
– Category 2 (95-110mph) 182,026 7.5%
– Category 3 (111-129mph) 25,135 1.0%
TOAMASINA
– Weak Tropical Storm 2,657,914 73.2%
– Strong Tropical Storm 1,473,471 40.6%
– Category 1 (74-95mph) 411,127 11.3%
– Category 2 (95-110mph) 200,378 5.5%
– Category 3 (111-129mph) 80,648 2.2%

Tropical Cyclone ENAWO – Daily Update 7 March 2017 0600 UTC

The African Risk Capacity monitors tropical cyclone activity in the South-West Indian Ocean (SWIO) and relies on Africa RiskView, a disaster risk modelling platform that uses satellite-based and other geo-information to forecast wind speed and storm surge height and estimate population affected and economic loss. These modelled lesses are the underlying basis of the insurance policies issued by the ARC Insurance Company Limited, the financial affiliate of the ARC Agency, which pools risk across the continent.
Name Event Number Naming Date Current Position Current Wind Speed
ENAWO 09 03/03/2017 -14.6S 50.6E 231.5 km/h
  • Forecasts 
  • Urban Wind Speed 
  • Population Affected 

The following maps shows the actual and forecast (dotted line) cyclone track, as well as the forecast peak wind speed at the time of reporting (see map title):

The following map shows the forecast peak surge depth at the time of reporting:

NB: It is important to note that these maps are based on forecasts, which will be updated as soon as the next update on the cyclone track is released.

The following graph(s) show the peak wind speed (and surge depth where applicable) for selected locations. The x-axis represents the timeline, which can include both actual and forecast wind speed (and surge depth where applicable):

NB: It is important to note that these graphs are based on forecasts, which will be updated as soon as the next update on the cyclone track is released.

Antananarivo
Antananarivo
Toamasina
Toamasina

Based on the forecasts presented under the previous tabs, Africa RiskView calculates the potential number of people affected by the tropical cyclone. The table below shows the number of people affected (by different categories of wind speed). It is important to note that these are forecast-based and thus subject to change as soon as the next update on the cyclone track is released:

Location / Category Population affected
MADAGASCAR
ANTANANARIVO
– Weak Tropical Storm 5,556,270 86.5%
– Strong Tropical Storm 104,213 1.6%
ANTSIRANANA
– Weak Tropical Storm 1,458,880 88.0%
– Strong Tropical Storm 933,112 56.3%
– Category 1 (74-95mph) 792,404 47.8%
– Category 2 (95-110mph) 534,373 32.2%
– Category 3 (111-129mph) 233,173 14.1%
– Category 4 (130-156mph) 17,886 1.1%
FIANARANTSOA
– Weak Tropical Storm 556,002 11.8%
MAHAJANGA
– Weak Tropical Storm 1,788,585 73.6%
– Strong Tropical Storm 1,278,828 52.6%
– Category 1 (74-95mph) 743,348 30.6%
– Category 2 (95-110mph) 322,084 13.2%
– Category 3 (111-129mph) 97,326 4.0%
TOAMASINA
– Weak Tropical Storm 1,907,643 52.5%
– Strong Tropical Storm 787,464 21.7%
– Category 1 (74-95mph) 356,682 9.8%
– Category 2 (95-110mph) 229,852 6.3%
– Category 3 (111-129mph) 136,964 3.8%
– Category 4 (130-156mph) 1,221 0.0%

PRESS RELEASE – African Risk Capacity and the African Development Bank partner to strengthen African countries struggling with climate disasters

Click here to download the PDF version.

ABIDJAN, Côte d’Ivoire / JOHANNESBURG, South Africa / HAMILTON, Bermuda, 7 March 2017

The African Risk Capacity (ARC) has added a crucial partner to its portfolio by formally teaming up with the African Development Bank (AfDB) to strengthen mechanisms to manage weather-related risk on the continent. This partnership will formalize a technical collaboration to enhance risk management infrastructure and policy across Africa; it will also support African countries in building resilience against climate shocks and in taking ownership of their disaster response.

In concrete terms, AfDB and ARC Agency will work together to develop their Member states’ capacity in understanding the value of risk transfer tools.

The partnership is intended to result in ARC Member countries integrating risk management into their policy and development objectives, with a particular focus on recurrent disasters such as drought, floods and tropical cyclones as well as on improved resilience and speedier recovery after disasters.

ARC and AfDB signed the Memorandum of Understanding (MOU) on the margins of ARC’s Fifth Conference of Parties (CoP5) in Abidjan, Côte d’Ivoire on 7th March 2017.

Background

The signing of the MOU is subsequent to the Letter of Intent (LOI), which was signed between the two institutions in May 2016 during the AfDB’s Annual Meetings in Lusaka.  The MOU formalizes a technical partnership to collaborate on the enhancement of the risk management infrastructure and policy regime across Africa.

The aim of this partnership will be for the institutions to collaborate: in the development of capacity and services; providing capacity building to individual countries; to embed risk management in planning and to deepen the understanding of the value of risk transfer tools. This collaboration is in line with the support that the Bank should provide to Regional Member Countries (RMCs) pursuant to its Charter as well as its role in assisting RMCs to adapt to the growing hazards from climate change.

Signing the MOU on the behalf of the African Development Bank, the Senior Vice-President, Dr. Frannie Leautier, stated: In the context of this MOU, ARC and AFDB will partner to support Member States in key areas, which will lay the foundations for a robust approach at the national-level around disaster risk financing.”

Mr. Mohamed Béavogui, United Nations Assistant Secretary-General and the Director-General of ARC, views the MOU with AfDB a key milestone, stating: “this partnership with AfDB will complement ARC as we will jointly train and prepare countries to better manage weather-related risk and mainstream insurance into their disaster management plans.”

***

About African Risk Capacity (ARC)

The African Risk Capacity Agency (ARC Agency) was established in 2012 as a Specialised Agency of the African Union (AU) by a Conference of Plenipotentiaries – consisting of 32 African nations – to help African Union Member States improve their capacities to better plan, prepare and respond to weather-related disasters. The objective of the ARC Agency is to assists AU Member States to reduce the risk of loss and damage caused by extreme weather events affecting Africa’s populations by providing, through sovereign disaster risk insurance, targeted responses to natural disasters in a more timely, cost-effective, objective and transparent manner.

The African Risk Capacity Insurance Company Limited (ARC Ltd) is a financial affiliate of the African Risk Capacity (ARC), a specialized agency of the African Union (AU), an initiative designed to improve current responses to climate-related food security emergencies. ARC Ltd is a mutual insurance facility comprised of its members, which included in 2016: Burkina Faso, Mali, Mauritania, Niger, Senegal, the Gambia. – The membership also includes its capital contributors. KfW on its own behalf, and for the account of the Federal Republic of Germany acting through its Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, BMZ) and the United Kingdom (Department for International Development, DfID) have contributed the first tranches of their respective EUR 50 million and GBP 90 million commitments.

For more information, please visit: www.africanriskcapacity.org

*** 

About African Development Bank (AfDB)

The African Development Bank Group (AfDB) is a multilateral development finance institution established to contribute to the economic development and social progress of African countries. The AfDB was founded in 1964 and comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund. The AfDB’s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region. The AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC).

Since 2016 and within the framework of its Ten Year Strategy (TYS 2013 – 2022) the Bank has stepped up its pace to Africa’s development by focusing on five priorities that are crucial for accelerating Africa’s economic transformation. The Bank calls them the “High 5s”: Light up and power Africa; Feed Africa; Industrialise Africa; Integrate Africa; and Improve the quality of life for the people of Africa. Within the context of the High 5s, the Bank has revamped the review its strategic focus to give greater attention to Africa’s fundamental challenges and how the Bank is addressing them.

For more information, please visit: www.afdb.org

***

 For further Information, please contact:

info@africanriskcapacity.org – Tel: +27 11517 1640

https://www.afdb.org/en/contact-us/ – Tel: +225 2026 3900

***

ARTICLE – African Risk Capacity: Insurance is vital, but no magic bullet to fight drought in Africa

Photo: REUTERS/Mike Hutchings
Photo: REUTERS/Mike Hutchings

Written by Alex Whiting for Thomson Reuters Foundation, republished on Zilient, PreventionWeb, and Braced.

London – More developing countries urgently need insurance to cushion their farmers against weather extremes that can worsen poverty, but it is no magic bullet to ward off the escalating impacts of climate change, experts say.

The burning question of how to stop drought becoming a major crisis – especially in Africa – has caused many to eye insurance as a possible answer.

“People think sometimes that insurance is the solution for everything. It is not correct,” said Mohamed Beavogui, director general of the African Risk Capacity, an African Union agency that helps states plan for natural disasters and climate change, and provides them with insurance through its company, ARC Limited.

“Insurance is … (for) when you have done everything you can and there is still a risk you cannot cover,” said Beavogui.

Planning for those risks – such as the number of people a government would be unable to help in a crisis – is vital, he told the Thomson Reuters Foundation.

As climate change bites harder, bringing with it worse droughts and floods, demands on donors’ purse strings are likely to grow, and experts say development gains – especially in Africa – are at risk of being rolled back.

Last year, southern African states appealed for $2.9 billion in aid when the region was hit with its worst drought in 35 years, affecting 39 million people. Now, drought in the continent’s east is pushing millions into hunger.

Insurance can be triggered more quickly than international aid, which can take months to fund. ARC’s cover is based on a pre-agreed plan for how the government will use the payout.

Since ARC Ltd began issuing policies in 2014, eight nations have taken out insurance and four – Senegal, Mauritania, Niger and Malawi – have received payouts totalling $34 million.

The index-based insurance offers maximum coverage of $30 million per country per season for drought events that occur with a frequency of one in five years or less.

But while drought last year left 6.5 million people in Malawi in need of food aid, Malawi did not receive an ARC payout until January.

Malawi took out insurance based on a crop – long-cycle maize – that, as it turned out, most farmers did not grow in the 2015/2016 season. Long-cycle maize survived the drought, while the short-cycle maize most farmers grew did not.

In the end, ARC’s member states agreed to an $8.1 million payout for Malawi – the amount it would have received had the government requested short-cycle maize as the base.

“It means that we shouldn’t rely only on data the government gives us,” Beavogui said. ARC will now also check what farmers are growing with research centres and extension services, among others, he added.

Jury still out

Insurance companies that pay out directly to farmers are still few and far between in many developing countries, and they offer limited services.

Where they do exist, they mainly serve commercial farmers because the poorest cannot afford to pay premiums without help from a donor or government, said Andrew Shepherd, director of the Chronic Poverty Advisory Network, based at the Overseas Development Institute, a London-based thinktank.

“The jury is still out” on whether insurance can make the poorest farmers more resilient to drought, but it can play an important role in preventing wealthier farmers from becoming impoverished, he said.

“All the focus by governments, and often donors, is on getting people out of poverty, and not on preventing people from falling into poverty,” he said.

India is one of the few developing countries with a national insurance scheme for farmers, including those with as little as one cow or buffalo, which works through local agents, said Shepherd.

Senegal has two kinds of insurance – macro-insurance through ARC, and micro-insurance – both of which paid out when bad drought hit in 2014.

The Compagnie Nationale d’Assurance Agricole du Senegal (CNAAS) – set up by the government, insurance companies and international agencies – targets most farmers in rain-fed crop areas with index-based insurance products.

In 2014, Senegal’s ARC payout reached people and livestock with aid, getting help to herders within three months, said Mathieu Dubreuil, micro-insurance advisor at the World Food Programme (WFP).

“It was a good match” between ARC which pays out in a crisis and micro-insurance schemes that pay out more often, he said.

WFP, which offers small-scale insurance for farmers, is also exploring taking out ARC insurance, which would give an additional payout to countries, disbursed either by WFP or through the government.

Vicious cycle of hunger

In Malawi, farmers are waiting for the April maize harvest to bring an end to months of food shortages.

“If we are not careful, we will have a vicious cycle of hunger,” said Wycliffe Kumwenda of the National Smallholder Farmers’ Association of Malawi, representing more than 100,000 farmers.

Uninsured farmers are condemned to queue up for food aid – time taken away from cultivating their fields – while hunger saps their energy, he said.

There is some insurance for Malawian tobacco farmers, but many do not know about it. Premiums are a problem too, as is the ability to make a claim, Kumwenda said.

“We need to install proper instruments that can capture weather parameters like rainfall (and) temperature,” he said. “Most of the met stations are not reliable.”

That makes claims hard to justify, putting off potential insurance providers, he added.

As climate impacts are expected to worsen in the coming years, potentially pushing up the cost of premiums, ARC is developing an Extreme Climate Facility (XCF) which will give countries access to finance for climate change adaptation.

“You have to insure what you cannot cover, and at the same time you have to prepare and adapt,” said Beavogui. “My real fear is we don’t do it quickly enough.”

COMMUNIQUE DE PRESSE – Malawi reçoit un décaissement de 8M$ de L’ARC pour les ménages affectés

Télécharger en version PDF.

JOHANNESBURG, Afrique du Sud / LILONGWE, Malawi / HAMILTON, Bermudes, 14 novembre 2016

La société d’assurance mutuelle de l’ARC (ARC Ltd) traite actuellement un décaissement d’environ 8,1 millions de dollars au gouvernement du Malawi pour soutenir sa réponse à la sécheresse, suite à la mauvaise saison agricole de 2015/16.

Le ministre des Finances, de la Planification économique et du Développement du Malawi, l’honorable Goodall Gondwe, a déclaré: «Le Malawi se félicite du paiement de l’ARC Ltd, compte tenu des défis importants pour obtenir des financements pour venir en aide aux millions de ménages affectés dans le pays.»

Les fonds seront décaissés dès que le plan du gouvernement sur l’utilisation du versement de l’assurance – connu sous le nom de Plan final de mise en oeuvre – est approuvé par l’ARC. Il s’agit d’une procédure standard pour les décaissements de l’ARC, qui devrait avoir lieu à la fin du mois de Novembre.

Contexte

ARC Ltd émet des polices d’assurance pour le compte de ses États membres africains. Tout décaissement est fondé sur les résultats de son modèle de risque lié à la sécheresse, Africa RiskView. En étroite collaboration avec ARC, chaque État personnalise le modèle afin que celui-ci reflète son profil de risque historique lié à la sécheresse, ainsi que ses pratiques agricoles actuelles.

Le Malawi a souscrit à un contrat d’assurance paramétrique contre la sécheresse auprès de l’ARC Ltd pour la campagne agricole 2015/16. Dans un premier temps, aucun paiement n’a été déclenché car le modèle indiquait un faible nombre de personnes touchées par la sécheresse. Cependant, l’estimation de la population touchée par le gouvernement du Malawi était beaucoup plus élevée, suggérant une divergence avec les résultats du modèle.

L’ARC a donc lancé une étude technique approfondie. Elle a tout d’abord examiné la performance du modèle tel qu’il était initialement personnalisé par le Malawi et a constaté que le modèle avait fonctionné comme prévu, compte tenu de ses paramètres et des données de précipitations satellitaires utilisées. Les données satellitaires étaient conformes aux données sur les précipitations au Malawi.

Puis, l’ARC a mené des études sur le terrain, ainsi que des enquêtes sur les ménages en partenariat avec des techniciens malawiens, dont des chercheurs du Centre pour le développement agricole et rural (CARD) de l’Université d’agriculture et des ressources naturelles de Lilongwe (LUANAR).

Il résulte de cette analyse que les agriculteurs cultivent davantage un type de culture différent de celui qui avait été retenu dans le modèle. Les agriculteurs sont passés ces dernières années à la culture du maïs à court-cycle (nécessitant une période de croissance de 90 jours), alors que la personnalisation du modèle prenait en compte une variété de maïs nécessitant, pour sa part, une période de croissance de 120 à 140 jours. Les précipitations en 2015/16 étaient particulièrement défavorables au maïs à cycle court, de sorte que la modification de cette hypothèse de culture dans le modèle a donné un résultat très différent.

Lorsque l’ARC a corrigé cette hypothèse de culture dans le modèle Africa RiskView, les résultats ont donné lieu à un modèle qui offrait une représentation raisonnable de la situation sur le terrain. Cela a donc entraîné un décaissement au gouvernement du Malawi, selon le contrat d’assurance révisée.

Les travaux de l’ARC ont confirmé que le moteur technique Africa RiskView est une plateforme de modélisation robuste. Cependant, le fait de devoir modifier les données critiques dans le cas du Malawi met l’accent sur la nécessité de formuler des hypothèses appropriées et réalistes, basées sur les meilleures données récentes disponibles lors de la personnalisation du modèle.

Le président de l’ARC Ltd, le Dr Lars Thunell a déclaré: « Le cas du Malawi a montré qu’une attention accrue est nécessaire pour valider les données d’entrée nationales fournies pour le modèle. La capacité d’un modèle à représenter la réalité dépend de l’exactitude des hypothèses de départ et des données. Sur la base d’une nouvelle personnalisation, fondée sur une hypothèse plus précise par rapport au type de culture de référence, un contrat d’assurance modifié a été émis pour le gouvernement du Malawi et un paiement a été déclenché. »

L’ARC est une organisation d’États membres dont l’objectif est de garder ses membres au cœur de son action. L’ARC Ltd n’est pas seulement une société d’assurance commerciale, mais fait partie d’une institution de développement établie sous le leadership des États membres de l’Union africaine, y compris le Malawi.

Le Dr Ngozi Okonjo-Iweala, Présidente du Conseil d’administration de l’Institution de la Mutuelle panafricaine de gestion des risques, a déclaré: «L’ARC a été créée par les gouvernements africains dans le but de leur fournir les outils et le soutien nécessaires pour mieux gérer les risques liés aux catastrophes naturelles. L’ARC soutient le Malawi et continue à aider le pays à élaborer une stratégie globale et efficace de gestion du risque de sécheresse.»

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A propos de la mutuelle panafricaine de gestion des risques (ARC)

L’Institution de la Mutuelle panafricaine de gestion des risques (Institution de l’ARC) a été créée en 2012 en tant qu’institution spécialisée de l’Union africaine (UA) par une Conférence de plénipotentiaires pour aider les États membres de l’Union africaine à améliorer leurs capacités à mieux planifier, préparer et répondre aux catastrophes naturelles. L’objectif de l’Institution de l’ARC est d’aider les États membres de l’UA à réduire le risque de pertes et dommages causés par des phénomènes météorologiques extrêmes touchant les populations africaines en fournissant, par une assurance contre le risque souverain, des réponses ciblées aux catastrophes naturelles, d’une manière plus rapide, rentable, objective et transparente.

Pour plus d’informations, visitez: www.africanriskcapacity.org

La société d’assurance de l’ARC (ARC Ltd), créée en 2013, est une filiale financière de la Mutuelle panafricaine de gestion des risques.

L’adhésion au groupe d’assurances 2015 de la société comprenait les pays qui ont souscrit des contrats d’assurance afin de couvrir les saisons agricoles au cours de l’année civile commençant le 1er mai 2015; le groupement 2015/2016 comprenait la Gambie, le Kenya, le Malawi, le Mali, la Mauritanie, le Niger et le Sénégal. Les membres de l’ARC Ltd incluent également ses contributeurs en capital, le Royaume-Uni (par le biais du Département du Développement International) et l’Allemagne (La KfW banque de développement au nom du ministère fédéral de la coopération économique et du développement BMZ).

Pour plus d’informations, visitez: http://ltd.arc.int

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Pour de plus amples informations, veuillez contacter: info@africanriskcapacity.org
Tél: +27 11517 1640; +27 11517 1535

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PRESS RELEASE – Malawi to receive USD 8M insurance payout to support drought-affected families

Click here to download the PDF version.

JOHANNESBURG, South Africa / LILONGWE, Malawi / HAMILTON, Bermuda, 14 November 2016

The African Risk Capacity Insurance Company Limited (ARC Ltd) is processing an insurance payout of approximately USD 8.1 million to the Government of Malawi to support its response to the drought which resulted from the poor 2015/16 agricultural season.

The Minister of Finance, Economic Planning and Development for Malawi, Honourable Goodall Gondwe, said: “Malawi welcomes the payout from ARC Ltd given the significant challenges in securing financing to support the millions of affected households in the country.”

The payout will be released to Malawi as soon as the Government’s plan on how the payout will be used to respond to those affected by drought – known as the Final Implementation Plan – is approved by ARC. This is standard practice for ARC payouts, and is expected to take place by the end of November.

Background

ARC Ltd issues insurance policies to its African Member governments; any payout thereof is based on results from its drought risk model, the Africa RiskView. In close consultation with ARC Ltd, the model is customised for and by each country to reflect the country’s historical drought risk profile and current farming practices.

Malawi bought a parametric drought insurance policy from ARC Ltd for the 2015/16 agricultural season. The policy did not initially trigger a payout, because the model indicated a low number of people affected by the drought. However, the Government’s estimate of the impacted population in Malawi was much higher, suggesting a discrepancy in the results of the model.

ARC investigated the discrepancy through extensive technical work. It first examined the performance of the model as it was originally customised by Malawi, and found that the model had performed as expected given its parameters and the satellite-based rainfall data used. The satellite data was in line with Malawi’s ground-based rainfall data.

Subsequently, ARC conducted extensive fieldwork and household surveys in partnership with Malawian technical experts, including researchers from the Centre for Agricultural and Rural Development (CARD) at the Lilongwe University of Agriculture and Natural Resources (LUANAR).

This work revealed that farmers had switched to a greater extent to growing a different type of crop than that assumed in the model. Farmers shifted in recent years to planting maize with a 90-day growing period, compared to the maize variety with a growing period of 120-140 days as assumed in the customisation of Malawi’s model. The rainfall pattern in 2015/16 was particularly unfavourable to the shorter cycle maize, such that correcting this crop assumption in the model resulted in a very different modelled outcome.

In fact, when ARC re-customised the Africa RiskView to correct this crop assumption, it resulted in the model outcome providing a reasonable representation of the situation on the ground. This in turn triggered a payout under the revised policy to the Government of Malawi.

ARC’s work confirmed that the Africa RiskView technical engine is a robust modelling platform. However, having to correct key data in the case of Malawi emphasises how critical it is to make appropriate and realistic assumptions based on the best-available and current data when customising the model.

The Chair of ARC Ltd Board, Dr. Lars Thunell stated: “The case of Malawi has showed that heightened attention is necessary in validating national input data provided for the model. Any model’s ability to represent reality depends on the accuracy of starting assumptions and data. Based on the re-customisation using a more accurate assumption on reference crop type, an amended insurance policy was issued to the Government of Malawi and a payout has been triggered.”

ARC is a Member State organisation, and its aim is to keep its Members at the centre of its work. ARC Ltd is not merely a commercial insurance company, but part of a development organisation established with the leadership of African Union Member States including Malawi.

Dr. Ngozi Okonjo-Iweala, Chair of the African Risk Capacity Agency Board, further stated: “ARC was founded by African Governments with the objective of providing them with the tools and capacity to better manage natural disaster risks. ARC Ltd stands by to support Malawi and to continue to help the country develop a comprehensive and effective drought risk management strategy.”

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About African Risk Capacity (ARC)

The African Risk Capacity Agency (ARC Agency) was established in 2012 as a Specialised Agency of the African Union (AU) by a Conference of Plenipotentiaries to help African Union Member States improve their capacities to better plan, prepare and respond to weather-related disasters. The objective of the ARC Agency is to assists AU Member States to reduce the risk of loss and damage caused by extreme weather events affecting Africa’s populations by providing, through sovereign risk insurance, targeted responses to natural disasters in a more timely, cost-effective, objective and transparent manner.

For more information, please visit: www.africanriskcapacity.org

The African Risk Capacity Insurance Company Limited (ARC Ltd) was established in 2013 is a financial affiliate of the African Risk Capacity.

Membership in the company’s 2015 insurance pool included the countries which took out insurance contracts to cover agricultural seasons during the calendar year starting 1 May 2015; this 2015/2016 pool consisted of The Gambia, Kenya, Malawi, Mali, Mauritania, Niger and Senegal. – The members of ARC Ltd also include its capital contributors, the United Kingdom (through DFID) and Germany (KfW on behalf of BMZ).

For more information, please visit: http://ltd.arc.int

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For further Information, please contact:

info@africanriskcapacity.org
Tel: +27 11517 1640; +27 11517 1535

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