SADC considers establishing regional risk insurance
Southern Africa is set to establish a regional risk insurance scheme aimed at improving its rapid response to natural disasters.
Risk financing and insurance is one of the several measures that most countries and regions around the world use to limit the impact of disasters such as droughts and floods.
Other options include improving and harmonising contingency planning, collaborating in transboundary disaster risk reduction and establishing regional disaster funds.
Speaking at a recent Southern African Development Community (SADC) Disaster Risk Management and Financing workshop held on 7-8 August in Johannesburg, South Africa, head of the SADC Disaster Risk Reduction Unit, Clement Kalonga said it is critical for the region to come up with innovative mechanisms to address the impact of disasters.
He said SADC is in discussions with the African Union (AU) and other stakeholders to examine the spectrum of options available.
“The proposals and recommendations regarding disaster risk financing including regional risk insurance once developed will be submitted for consideration and approval by the relevant SADC structures,” he said.
SADC Finance Ministers have since directed the Secretariat to expedite the development of a regional risk insurance scheme to assist Member States to address both humanitarian and infrastructure reconstruction and recovery needs caused by natural disasters.
The Secretariat is expected to present a progress report to SADC Finance Ministers at their next meeting scheduled for March 2018.
African Union (AU) Commission Technical Coordinator for Disaster Risk Reduction in the Department of Rural Economy and Agriculture, Gatkuoth Kai, concurred, saying the region should invest in disaster risk reduction since it is cheaper than responding to emergencies.
Kai said the AU established the African Risk Centre (ARC) in 2012 as a specialized agency aimed at assisting member states to deal with various challenges.
“The ARC’s risk insurance pool provides African governments with an opportunity to protect their populations from adverse effects of extreme weather events and other environmental hazards,” he said.
A total of 27 countries including five from SADC namely Malawi, Madagascar, Mozambique, Zambia and Zimbabwe are signatories to the ARC.
The ARC has so far released US$34.4 million in pay-outs to Niger, Malawi, Mauritania and Senegal. ARC’s Director General, Mohamed Beavogui also said there is need for countries to come up with responses that transcend national boundaries as climate perils are not limited by borders.
“Although we cannot stop natural disasters or climate change, we can be proactive and prepare for them,” Beavogui said.
Disaster risks financing and insurance are tools and strategies to protect and assist citizens in the event of disasters.
Affected countries can use the insurance pay-outs to replenish their strategic grain reserves and distribute to affected regions. In some cases cash transfers are done.
The quest to embrace disaster risk financing and insurance is in line with regional, continental and international strategies on disaster risk reduction.
For example, one of the priorities of the Sendai Framework on Disaster Risk Reduction 2015-2030 is to focus on investing in disaster risk reduction for resilience emphasizing on risks transfer and insurance.
Options on disaster response have come at a time when southern Africa continues to be negatively affected by floods and droughts.
For example, the 2015/16 season drought resulted in an estimated 40 million people food insecure in the region, with Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland and Zimbabwe declaring a state of national disaster.
In the 2016/17 season, Cyclone Dineo in Mozambique resulted in an estimated loss of more than 29 000 hectares of crops, including maize, groundnuts, cassava and beans.
In Madagascar, Cyclone Enawo severely affected the country and left more than 50 people dead and almost 329,000 people homeless. – Sardc.net