The African Development Bank (AfDB) has announced a new $1 billion initiative to provide insurance for over 40 million farmers in Africa. The initiative, known as the African Risk Capacity (ARC), is designed to help farmers cope with the risks of climate change, such as droughts and floods. 97% of farmers in Africa do not have agricultural insurance.
ARC will provide farmers with access to weather-based insurance products that will pay out if their crops are damaged by natural disasters. The initiative will also help farmers to build resilience to climate change by providing them with training and access to improved agricultural technologies.
The African Risk Capacity (ARC) is a Specialized Agency of the African Union established in 2012 to help African governments improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters. ARC provides African governments with risk transfer solutions through a mutual insurance pool and other risk pooling mechanisms, which help to spread the financial burden of disasters across the continent. ARC also provides technical assistance to African governments to help them develop disaster risk reduction and management strategies.
Moreover, the ARC also provides capacity building to African governments to help them build the skills and knowledge they need to manage disaster risk effectively. This includes training for government officials, disaster response teams, and communities. So far, the ARC provided over $100 million in payouts to African governments following disasters; it helped to develop early warning systems for droughts, floods, and other hazards in over 30 African countries; it trained over 10,000 government officials, disaster response teams, and community members on disaster risk management.
AfDB President Akinwumi Adesina said that ARC is a "game-changer" for African farmers. "Climate change is already having a devastating impact on African agriculture," he said. "ARC will help farmers to cope with the risks of climate change and build resilience to its impacts."
The ARC initiative is a welcome development for African farmers, who are often too poor to afford insurance. ARC will help to protect farmers from the financial losses caused by natural disasters, and it will also help them to invest in improved agricultural technologies.