Reinsurance News

African Risk Capacity to assist Mozambique with extreme weather risks

15th May 2019 - Author: Matt Sheehan

The African Risk Capacity (ARC) Agency and the Government of Mozambique have signed a Memorandum of Understanding (MoU) to provide mid to long-term solutions against the risk of drought, flood, and tropical cyclone events in the country.

african-risk-capacity-logoThe MoU defines the terms under which the ARC will provide support for Mozambique, which includes the training of government officials and other efforts to help Mozambique reach its objectives.

Additionally, Mozambique will work with the ARC Agency to prepare for its potential participation as an ARC Ltd member in future, although it is not committed to this outcome.

Mozambique is particularly vulnerable to climate change due to its location and geography, which expose large areas of the country to tropical cyclones, droughts, and river/coastal storm surge flooding.

These risks are heightened by the country’s extensive coastlines and socioeconomic fragility, which threatens infrastructure, coastal agriculture, key ecosystems and fisheries.

“Although insurance will never cover all the risks associated with a peril in each country, the ARC approach allows for the risks to be managed in a way that multiplies the benefits from limited resources available to Government, ” said Mohamed Beavogui, United Nations Assistant Secretary-General and Director-General of ARC.

Beavogui indicated that the aim of the partnership with Mozambique is to help the government understand its own risk profile in relation to the carious weather perils it faces, and to develop customised response plans.

“The Government of the Mozambique appreciates the onset of formal collaboration with the African Risk Capacity,” added Adriano Afonso Maleiane, Mozambique’s Minister of Economy and Finance.

“We expect that the MoU will initial a well-coordinated take-off of activities towards strengthening the capacities of our climate management authority officials as well as other personnel to better understand our risk profile and provide quicker responses in the event of natural disasters,” he continued.

ARC is also working with other development partners, including the African Development Bank and the World Bank, towards a premium financing support to Mozambique when it decides to take the sovereign disaster risk insurance coverage.

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