Content

Cooperation in action

Insurance for Africa

Drought poses a particular risk for African countries, and climate change will exacerbate the problem. In the past, little has been done to address the economic consequences of this. But that is now changing.

As part of the InsuResilience initiative, Germany and the United Kingdom are supporting the African Risk Capacity (ARC). When a drought hits, ARC finances a contingency plan that has been agreed in advance with the country in question and approved by a panel of independent experts. The insurance is designed in such a way that it creates incentives to improve resilience to drought and thus reduce the risk of future damage.

The first insured event occurred in 2015, when 1.3 million people affected by drought in Niger, Mauritania and Senegal received insurance benefits through ARC such as food and animal fodder to an overall value of 26 million US dollars. This made it possible to save some 500,000 head of livestock.

All African Union member states can take out insurance from ARC. At present, five African countries have taken out drought insurance: Mauritania, Mali, Burkina Faso, Senegal and Gambia.

New insurance products providing cover against events such as floods and heavy winds are now also being developed with the support of InsuResilience. They will help countries respond promptly to extreme weather events. This will benefit small farmers in particular, whose very survival can be jeopardised by the loss of just one harvest.