Rwanda has hosted the 8th meeting of parties of the African Union Risk Capacity (ARC) – a continental integrated solution to tackling the impact of natural disasters on vulnerable people.
ARC transfers the burden of weather risk away from governments, enabling them to build resilience and better plan, prepare and respond to extreme weather events.
Africa has for long lacked the appropriate financial mechanisms to respond effectively to natural disasters, yet they claim thousands of properties without forgetting many lives lost.
In Africa, both natural and man-made disasters continue to wreak havoc across countries, with natural disasters such as floods, wildfires and droughts also affect countries across Africa.
Whereas much attention has been given to HIV and AIDS and its impact on African communities, it seems that little research has been done on the impact of – and response to – other disasters
As a result of this, ARC was established at the African Union level to provide governments with access to immediate funds for early and planned responses to natural disasters.
The body brings together four critical elements including early warning, contingency planning, insurance and adaptation finance.
For African countries to become members of ARC, they undertake several processes, including signing a Memorandum of Understanding for in-country capacity building, which involves customisation of Africa RiskView software to define the risk profile for the country, preparing a contingency plan for ARC payouts, and determining risk transfer parameters.
When countries have satisfactorily completed this process, they receive a Certificate of Good Standing from the ARC Agency Governing Board which serves as the basis upon which a government can secure insurance coverage with ARC’s financial affiliate, ARC Insurance Company Limited.
For droughts, triggered payouts from ARC Ltd reach national treasuries within 2-4 weeks of the end of the growing season so that the first assistance can reach those who need it within 120 days.
Speaking at the 8th Session of the African Risk Capacity (ARC) Agency Conference of the Parties taking place in Rwanda’s capital Kigali, the Minister of Agriculture, Dr Geraldine Mukeshimana said that with the establishment of ARC, the African Union established a commendable agency that deals with climate change risks.
“The African Union has created ARC, a commendable Agency with a purpose of assisting its Member States to improve their capacities, prepare and appropriately respond to extreme weather events and natural disaster that is affecting its citizen, with aim to protect the lives and livelihoods of populations at risk from such catastrophes,” Minister Mukeshimana said.
According to Minister Mukeshimana, “The risks affecting our continent may also differ from one region to another or one country to another. Rwanda’s disaster profile is dominated by droughts, floods, landslides, heavy rain with strong winds, diseases and epidemics that disrupt people’s lives and livelihoods, destroy the infrastructure and interrupt economic activities and retard development.”
A national risk atlas released in 2015 estimated that A combined assault by disasters against Rwanda could cost the country a massive Rwf100 billion ($132 million). These hazards, the survey said, these hazards, if they all occur, can inflict a combined economic loss of $132,232,970.
According to World Bank, Sub-Saharan Africa knows more than its fair share of disasters induced by natural hazards, with most recent victims in the Horn of Africa, where floods hit Mali and Rwanda, and landslides in Ethiopia and Uganda.
According to the World Bank, between 2005 and 2015, the region experienced an average of 157 disasters per year, claiming the lives of roughly 10,000 people annually.
Currently, the African Union Risk Capacity has 23 members including Rwanda, Gabon, The Gambia, Ghana, Guinea; Guinea Bissau, Kenya, Liberia, Libya; Madagascar, Malawi, Mali; Mauritania, Mozambique, Niger and Nigeria.
Other members are Sao Tomé & Principe, Senegal, Sierra Leone, Sudan, Togo, Zambia and Zimbabwe.
The first ARC Ltd pool was launched in May 2014, with the issuance of drought insurance policies totalling nearly $130 million in coverage to Kenya, Mauritania, Niger and Senegal.
This was in return for a total premium cost of $17 million. Since 2014, four additional countries – The Gambia, Malawi, Burkina Faso, and Mali – have joined ARC Ltd risk pools.
Since 2014, ARC Ltd has disbursed $36.8 million to ARC Ltd policyholders as a result of drought events, often ahead of the UN appeal.
These funds have gone towards assisting over 2.1 million people whose livelihoods rely on agriculture, preventing the loss of hard-earned developmental gains.
Addressing delegates at the Kigali meeting, Agriculture Minister Dr Geraldine Mukeshimana said that in 2018, Rwanda signed a memorandum with ARC in order to address the impact of extreme weather events, including providing training support to Government personnel as preparation for Rwanda’s potential participation in future ARC drought insurance pools.
“All these will depend on the outcome from the current assessment being carried out jointly by the ARC and Local team. We have heard also that ARC is also pursuing other researches that can provide more reliable tools to deal with the flood, tropical cyclones (just to mention few) and why not put in place those dealing with Lightning or earthquake events,” she said.