frican Risk Capacity Insurance, the subsidiary of African Risk Capacity (ARC), a specialised agency of the African Union, says it is keen to help the continent hedge against disaster-induced risks without having to rely on foreign aid.
The insurer said at an ARC conference last month that international assistance is usually secured on a largely ad hoc basis after disasters have struck and that governments are forced to divert funds in national budgets from essential development programmes in order to respond to the crises, reported The New Times.
Ms Olipa Phiri Mwansa, the Minister in the Office of the Vice President in Zambia, said that almost 1.5m people have died due to natural disasters over the past 20 years. Citing a United Nations’ disaster risk reduction report, she said this year Africa has registered more than 45m people in 15 countries in Africa who needed support to meet their daily requirements.
She added, “Globally, international assistance still takes too long to arrive, hence a more proactive approach is needed, and this is what the ARC is bringing on the table to help.”
According to ARC, each $1 spent on early intervention saves $4.4 that would be spent in response after the crisis has unfolded.
Mr Mohamed Beavogui, ARC director general, said that since the inception of the insurer five years ago,the company has paid $36.8m to policyholders as a result of drought events in six countries including Senegal, Niger, Mauritania, and Mali. These funds have gone towards cash transfers, subsidising livestock feed, replenishing depleted food reserves, and distributing emergency food supplies.
However, he said, many improvements are needed because the insurance initiative is still in its nascent stage. Thirty-three African countries are members of ARC, while only nine have joined its insurance scheme.