Zim To Benefit From US$100 Million African Risk Capacity Fund

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By Staff Reporter

ZIMBABWE is in line to benefit from a US$100 million fund from the African Risk Capacity Limited (ARC Ltd) designed to make insurance more affordable for farmers.

ARC Ltd was founded in 2014 and is a hybrid mutual insurer and financial affiliate of the African Risk Capacity Group.

It provides parametric insurance services to African Union Member States and farmer organisations, employing innovative financing mechanisms to pool disaster-related risk across Africa and transferring it to international risk markets.

In so doing, ARC Ltd says, this improves the continent’s response to climate-related disasters and contributes to resilience building and ultimately to food security.

“One of the barriers that we face to the uptake of insurance is the unaffordability of premiums so the role of subsiding premiums falls on the governments themselves and also on international development partners.”

“At the level of the ARC we have manged to mobilise US$100 million in funding for governments to be able to subsidise their participation in the insurance programme. Zimbabwe is already a client and in 2020 we paid a claim to the government after the drought that we experienced here,” ARC Ltd chief executive officer, Lesley Ndlovu told the media at a business indaba held in Harare last week. Efforts are ongoing to ensure the ARC product portfolio is reflective of the needs of member states and provides progressive solutions to weather-related disasters.”

Zimbabwe is one of 35 African states that have signed the ARC treaty.

“At the African Risk Capacity we have a mandate to grow the number of people that are covered by insurance. Currently we are covering about 30 million people every year through our insurance programme. But when you look at the needs across the African continent… it’s close to 700 million people. We already have a huge impact on the continent but there is room for us to do a great deal more,” Ndlovu, who is a Zimbabwean and heads ARC Ltd’s Johannesburg headquarters, said.

Meanwhile, Ndlovu who has spent his professional life in places such as Bermuda, Singapore, France, United Kingdom and South Africa and hails from Filabusi in Matabeleland South believes Zimbabwe’s private sector has a big role to play in tackling the question of financing climate change adaptation.

“There’s a lot of willingness from the private sector to create solutions that are relevant to the farmers in Zimbabwe,” Ndlovu said.