By James Muonwa
THE International Finance Corporation (IFC), a World Bank Group member, has partnered the local insurance industry to create tailor-made insurance products for smaller-holder farmers to protect them from the vagaries of climate-induced losses.
IFC will collaborate with the Insurance and Pensions Commission (IPEC) to create demand for agricultural insurance products in the country to insure crops and livestock against hailstorms, cyclones, floods, draughts, among other calamities.
IPEC commissioner Grace Muradzikwa said the synergy inked this week was timely in light of the urgent need of insurance for smallholder farmers prone to weather induced losses.
Muradzikwa said: “This partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events such as drought, floods, heavy rainfall and heat waves. One of our key roles as the regulator is to develop the insurance sector in Zimbabwe.”
IFC Country Manager, Adamou Labara said agriculture was a key economic pillar whose risks needed to be curtailed.
“Agriculture is central to Zimbabwe’s economy, but it is a risky endeavour that is becoming riskier as weather patterns become less predictable. IFC’s partnership with IPEC will reduce the risks for Zimbabwe’s farmers by developing the foundation of agriculture insurance in the country. Supporting the agribusiness sector is an important part of IFC’s strategy to promote private sector growth across Africa,” said Labara.
Through the partnership, IFC will assess the risks smallholder farmers face, how they cope with risks, and will gauge the farmers’ appetite for agricultural insurance to protect their livelihoods.
A regulatory framework and enabling environment will be created for agricultural insurance and determine the features of products appropriate for local farmers.
Additionally, IFC will facilitate knowledge exchanges to help local insurance providers learn best practices from more developed agri-insurance markets.
Muradzikwa said agriculture is a significant contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about eight percent to GDP.
However, she added, there are currently limited insurance products in the country specifically designed to protect smallholder farmers.
IPEC is Zimbabwe’s insurance regulator, while IFC is the largest global development institution focused on the private sector in emerging markets, working in more than 100 countries, using capital, expertise, and influence to create markets and opportunities in developing countries.