The African Risk Capacity (ARC) is a Specialized Agency of the African Union established to help African governments improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters. Through collaboration and innovative finance, ARC enables countries to strengthen their disaster risk management systems and access rapid and predictable financing when disaster strikes to protect the food security and livelihoods of their vulnerable populations.
ARC is comprised of ARC Agency, a Specialized Agency of the African Union, and the ARC Insurance Company Limited (ARC Ltd), a financial affiliate that delivers risk transfer services. Together, they offer a comprehensive and continental solution to enable early and targeted responses to natural disasters in Africa through capacity building and innovative financing mechanisms.
As currently structured, the international system for responding to natural disasters is not as timely or equitable as it could be. Funding is secured on a largely ad hoc basis after disaster strikes, and 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 developed countries.
An African Solution to Disaster Risk
ARC is an African solution to one of the continent’s most pressing challenges, transferring the burden of climate risk away from governments – and the farmers and pastoralists whom they protect – to the ARC that can handle that risk much better. This African-owned, AU-led financial entity uses Africa RiskView, an advanced satellite weather surveillance and software – developed by the UN World Food Programme (WFP) – to estimate and trigger readily available funds to African countries hit by severe weather events. Because such events 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 significantly reduce the cost to countries of emergency contingency funds, while decreasing reliance on external aid.
By merging the traditional approaches of disaster relief and quantification with the concepts of risk pooling and risk transfer, ARC provides a pan-African disaster response system that meets the needs of those affected in a timelier and more efficient way and provides an important step forward in creating a sustainable African-led strategy for managing extreme climate risks