Germany's state development bank KfW and the World Food Programme (WFP) have committed to contribute US$2 million each, to African Risk Capacity Insurance Company Limited (ARC) to support premium financing of insurance against risks caused by extreme weather events in Zimbabwe, Treasury has said.
Zimbabwe will contribute US$500 000 and this will unlock maximum insurance cover of US$20 million. The ARC provides capacity building on preparedness for climatic shocks, as well as insurance against risks such as droughts.
Following the Government's participation in the ARC drought risk insurance policy, complemented by the United Nations WFP Replica Policy for the 2019/20 agricultural season, Zimbabwe received a total pay-out of US$1,75 million in June last year.
The pay-out assisted a substantial number of the country's vulnerable households in selected districts, through disbursement of unconditional cash transfers to food insecure and labour-constrained households (chronically ill, older person headed households) in the worst drought-affected wards. According to the Treasury, a total of 77 767 households from Chivi, Binga, Bulilima, Buhera and Uzumba.
"Zimbabwe is committed to participate in the 2020/21 ARC programme," said the Treasury.
"To relieve fiscal challenges that member states face in paying their premiums compounded by the effects of the Covid-19 pandemic, ARC has facilitated application of premium subsidy from KfW of German Government towards premium funding for the 2020/21 agricultural season.
"KfW of German and the World Food Programme (WFP) have committed to premium financing of $2 million each, to support Zimbabwe, while Zimbabwe will contribute US$500 000 towards premium financing. This will unlock a maximum insurance cover of US$20 million."
With the support of the United Kingdom, Germany, Sweden, Switzerland, Canada, France, The Rockefeller Foundation and the United States, ARC assists AU Member States in reducing the risk of loss and damage caused by extreme weather events affecting Africa's populations by providing, through sovereign disaster risk insurance, targeted responses to climate disasters in a more timely, cost-effective, objective and transparent manner.
ARC is now using its expertise to help tackle some of the other most significant threats faced by the continent, including outbreaks and epidemics.
Since 2014, 45 policies have been signed by the ARC Member States with US$ 83 million paid in premiums for cumulative insurance coverage of US$ 602 million, for the protection of 54 million vulnerable populations in participating countries.