Johannesburg, September 16, 2020 – In an effort to build resilience of the IGAD member States, IGAD Centre for Pastoral Areas and Livestock Development (ICPALD) partnered with African Risk Capacity (ARC), a specialized agency of the African Union (AU) and held a virtual meeting on 15th September, 2020 to raise awareness of ARC non-Member States in the Region [Eritrea, Ethiopia, Somalia, South Sudan, and Uganda] on the mechanism and its benefits.
ARC was established by Treaty in November 2012 to help its Member States strengthen their capacities to better plan, prepare and respond to extreme weather events and disasters. The aim of the meeting was to sensitize the IGAD Member States on Innovative Mechanisms for Disaster Risk Management and Financing.
The ARC Group was represented by Eva Kavuma the Chief Operating Officer of ARC Agency. Ms Kavuma indicated that the Group provides disaster risk adaptation services for member states through building capacities for the local micro-insurance sector, supporting the development of Disaster Risk Financing frameworks, mainstreaming gender in disaster risk management, strengthening monitoring and evaluation systems and awareness-raising around disaster risk financing in Africa.
Opening the meeting, Dr. Solomon Munyua, the Director of ICPALD highlighted on the disasters that faced the Horn of Africa region which include; floods, desert locusts, disease outbreaks (Rift Valley Fever) and droughts, and their impacts and hence the need for risk financing. Participants included partners from the European Union (EU), United Nations (UN) Agencies, African Development Bank (AfDB), Member States, International Committee of the Red Cross (ICRC) and International Non-Governmental Organizations.
The ARC provides support to its Member States through a country contextualized capacity building programme on risk profiling and analytics, early warning, early response planning and risk financing through insurance. In addition, and through research and development, the ARC is exploring products and systems for long-term climate change adaptation financing and investment as well as policy formulation around disaster risk financing including scaling up social protection safety nets in disaster situations in its Member States as well. Currently, ARC has a membership of 34 Member States, including Djibouti, Kenya, and Sudan in the IGAD Region.
Since the inception of the ARC risk transfer facility in 2014, 13 countries have taken out drought insurance coverage worth over $600 million, and 7 have received payouts of over US$ 60 million. These payouts have been used to implement pre-approved early response actions including relief aid food distributions, livestock feed and replenishment of national food reserves among others
The ARC risk transfer pool capitalizes on the economics of pooling the different natural risks across the continent of Africa which provides a basis for cheap and easy access to international insurance markets at sovereign level. According to ARC, risk pooling could enable countries to preserve up to 50% of their emergency reserve funds.
The main objectives of the workshop included;
- To (re)introduce the ARC mechanism to relevant Government Officials and Policymakers and other stakeholders on the ARC disaster risk financing approach and associated participation processes;
- To introduce the underlying agriculture and rangeland drought risk modelling software for risk profiling and analytics; early response operational planning; and risk financing model, and;
- To articulate the status of risk financing/transfer in the IGAD non-ARC members;
- To provide an overview of the benefits obtained by IGAD and ARC member states (MS) and lessons for other IGAD MS
- To set the basis for follow up actions for in-depth discussions with individual countries.
The following recommendations were made;
- Establish a platform for collaboration between ARC and IGAD to focus more on Range lands risk profiling with streamlined roles and responsibilities in depth
- Alignment of the Khartoum Plan with the ARC approach towards supporting local micro-insurance
- ARC and IGAD to engage in-depth with each country in a collaborative and contextualized approach that includes Government and Partners.
Acknowledgement: ICPALD acknowledges and appreciates ARC for funding this activity.
For more information:
- Mr Chinedu Moghalu Senior Communications Officer | African Risk Capacity (ARC) | E-mail: firstname.lastname@example.org
- Esther Azaa Tankou | Head of Information Division| Directorate of Information and Communication, African Union Commission | E-mail: YambouE@africa-union.org
African Risk Capacity (ARC) consists of ARC Agency and ARC Insurance Company Limited (ARC Ltd). ARC Agency was established in 2012 as a Specialized Agency of the African Union to help Member States improve their capacities to better plan, prepare and respond to weather-related disasters. ARC Ltd is a mutual insurance facility providing risk transfer services to Member States through risk pooling and access to reinsurance markets. ARC was established on the principle that investing in preparedness and early warning through an innovative financing approach is highly cost-effective and can save upward of four dollars for every dollar invested ex-ante.
With the support of the United Kingdom, Germany, Sweden, Switzerland, Canada, France, The Rockefeller Foundation and the United States, ARC assists AU Member States in reducing 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. ARC is now using its expertise to help tackle some of the other greatest threats faced by the continent, including outbreaks and epidemics.
Since 2014, 62 policies have been signed by Member States with US$101.7 million paid in premiums for a cumulative insurance coverage of US$722 million for the protection of 72 million vulnerable population in participating countries.
For more information, please visit: www.africanriskcapacity.org
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