African Risk Capacity (ARC) has revealed that Malawi, Mozambique, Zambia and Zimbabwe are likely to receive insurance payouts from the ongoing drought in the region, which is one of the worst in decades.
In a recent meeting between ARC and its partners, stakeholders reportedly discussed the response to the drought emergency, intending to minimise the impact on the lives and livelihoods of the most vulnerable.
According to ARC, the drought is yet more evidence of the impact of climate change, exacerbated by El Niño, a weather pattern of unusually warm water on the surface of the Pacific Ocean that is leading to higher temperatures and lower rainfall across southern Africa.
“This episode, recorded as one of the five strongest in history, has also led to devastating floods in other parts of the continent. In Southern Africa, about 20 million people are now facing crisis levels of acute hunger because of the El Niño-induced drought,” ARC explained.
The firm continued, “Before the start of the 2023/24 agricultural season, Malawi, Mozambique, Zambia and Zimbabwe, all countries severely affected by this crisis, made the critical decision to participate in ARC risk pools for drought.”
Now, based on early projections from ARC’s season monitoring tools, all four countries are likely to receive insurance payouts, which will be confirmed at the end of the season.
The risk pools, run by ARC Limited, the insurance affiliate of the ARC Group responsible for risk pooling and transfer, avail timely funds to facilitate early response to a disaster event.
In preparation for the end of the agricultural season, ARC, together with the in-country Technical Working Groups of the four countries, are in the process of finalising the Final Implementation Plans (FIP), a document that outlines the use of an ARC payout ahead of the end of the season.
Lesley Ndlovu, CEO of ARC Limited, commented, “This is a region we have assisted with significant drought payouts in the past. In 2022, we paid out $14.2 million to Malawi’s Replica partner, the World Food Programme; $5.3 million to Zambia and $1,4 million to Zimbabwe.
“The impact of disaster events goes beyond the immediate socio-economic costs and in the absence of instruments such as ARC, a disaster such as drought can easily trap vulnerable populations into perpetual cycles of poverty.
“It is our honour to work closely with the four countries’ Disaster Risk Management structures and contribute to their resilience-building efforts. It is moments like these when we can demonstrate the true impact of our work.”
Reena Ghelani, UN Assistant Secretary General and Climate Crisis Coordinator for the El Niño/La Niña response, said, “The farmers I met in Mozambique and Zambia told me that this drought is one of the worst they’ve experienced.
“For many of them, there will be nothing to harvest. That is why we need to provide food and cash assistance urgently. At the same time, the burden of climate change on these countries calls for a more comprehensive and sustainable approach to these recurring crises.”
Ibrahima Cheick Diong, UN Assistant Secretary General and ARC Group Director General, noted, “Once again, we are seeing the impact of extreme weather events on the lives and livelihoods of the most vulnerable, and we have to do all that is in our power to cushion this impact.
“Our hearts go out to the affected governments and their people as they work to comprehend the true extent of this disaster. Drought conditions are widespread across the southern African region and communities are facing extreme hunger, limited water supply and malnutrition, not to mention the loss of income from their agricultural activities.”
Menghestab Haile, World Food Programme RD, added, “The drought is hitting at a time of significant protracted unmet needs, with alarming food insecurity and malnutrition levels, and funding shortages that have stalled humanitarian activities.
“The drought has decimated livelihoods across southern Africa. The El Niño weather phenomenon serves as a poignant reminder of the climate crisis – and how urgent it is to scale up investment in activities that build resilience. Communities must be empowered with climate adaptation skills that will enable them to mitigate, reduce, and absorb the effects of climate shocks.”
