Zim takes out drought insurance
Harare (New Ziana) – Zimbabwe has taken out a drought insurance of US$1 million with the African Risk Capacity (ARC), giving cover for a maximum of US$5.3 million, a Cabinet Minister has said.
The ARC is a specialized agency of the African Union established to help African governments improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters.
Zimbabwe’s agriculture sector, which is regarded as the backbone of the economy, has under-performed in recent years largely due to recurrent climate change induced droughts.
The country suffered a catastrophic drought in the 2018/19 farming season, which was also compounded by a tropical cyclone which destroyed crops and livestock in the east.
The unpredictable weather patterns have prompted government to take out the drought insurance as one way, in addition to developing irrigation infrastructure, of minimizing losses in the agriculture sector.
Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said Cabinet had approved the signing of the insurance policy agreement between Africa Risk Capacity limited and the Zimbabwe government.
Zimbabwe will also sign a memorandum of understanding with the World Food Programme which will provide further funding for the insurance programme.
“Cabinet was informed that government through Treasury would purchase a drought insurance premium of US$1 million which will unlock a maximum coverage of US$5.3 million,” she said.
“Furthermore, the World Food Programme will pay a premium amount of USD 200 000 which will unlock a maximum coverage of US$1 million and this is for the coming season.”
She added: “The country will benefit in terms of ARC coverage of drought by preparing and putting in place necessary measures towards drought mitigation and early response to save the vulnerable populace.”
The ARC, run by 33 AU member states including Zimbabwe, enables participating countries to strengthen their disaster risk management systems and access rapid and predictable financing when disaster strikes to protect the food security and livelihoods of vulnerable populations.
Over the years, the ARC has provided US$36, 8 million in payouts for early responses, and US$ 400 million in drought risk coverage.