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African Risky Capacity, AfDB join hands to respond to natural disasters

Xinhua, May 25, 2016 Adjust font size:

The African Risky Capacity (ARC) on Wednesday signed a Letter of Intent with the African Development Bank (AfDB), a major step towards its goal of providing 2 billion U.S. dollars worth of annual climate disaster coverage to Africa's most vulnerable populations.

The Letter of Intent signed after a high-level panel discussion on the side-lines of the AfDB 2016 annual meetings in Lusaka, the Zambian capital marked an announcement of their intention to collaborate in the areas of planning, preparation and response to extreme weather events and natural disasters for the benefits of regional member countries of the bank.

The collaboration is expected to play a pivotal role in protecting investments for economic growth especially in key economic areas vulnerable to weather shocks such as agriculture, according to an emailed statement.

The Letter of Intent will support the introduction and mainstreaming of disaster risk financing into national fiscal policy in member states, it added.

"This signing between ARC and AfDB reinforces and formalizes an already strong partnership between both institutions and demonstrates the foresight and leadership of the bank in coordinating our efforts towards addressing the needs of our member states," Mohamed Beavogui, director-general of the ARC said after the signing ceremony.

The two institutions also signed a memorandum of understanding with the Inter-African Conference on Insurance Markets (CIMA), a regulatory and insurance body for 14 countries in west and east African for establishing working groups to study and implement strategies related to weather-index based insurance products for sovereign governments, and also for building risk management and insurance expertise within member states.

The ARC was established by a treaty in 2012 as a specialized agency of the African Union (AU) to help member states improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters, therefore protecting the food security of their vulnerable populations.

The AfDB and CIMA partnerships are expected to help drive ARC towards its goal of indirectly insuring 150 million people across 30 countries on the continent by 2020.

So far seven countries namely Niger, Senegal, The Gambia, Mali, Malawi, Mauritania and Kenya have purchased insurance from ARC Ltd. ARC is also launching a tropical cyclone insurance product this year and a flood insurance product in 2017 as part of its effort to increase insurance coverage across Africa. Endit