Representatives from South African ICMIF member African Risk Capacity (ARC) and the African Development Bank presented a symbolic USD 5.3 million cheque to the Zambian Government, to aid in the country’s recovery from the extreme drought event during the 2021/2022 agriculture season.

The payout is the result of drought insurance taken out by the Government of Zambia under the Africa Disaster Risk Financing Programme Multi-Donor Trust Fund, a fund supported by the Governments of the United Kingdom, through the Foreign, Commonwealth and Development Office, and Switzerland, through the Swiss Agency for Development and Corporation. The fund is managed by the African Development Bank. The payout will enable the country to carry out timely emergency response activities in communities affected by drought, through the provision of cash transfers and food assistance to ensure food is available for the targeted households during the lean season period.

Zambia’s Acting President, Her Honour WK Mutale Nalumango, received the payout cheque on behalf of the Zambian Government. In her keynote address, the Acting President welcomed the payout from ARC to the Republic of Zambia, stating that the funds would help the government to meet the relief and livelihood reconstruction requirements of the most vulnerable households impacted by the 2021/22 drought.

The Acting President expressed gratitude that her government, through the Ministry of Finance and the Disaster Management and Mitigation Unit (DMMU), took up insurance as a mitigation measure against drought.

“With the national treasury experiencing unlimited demand for the provision of public goods and services, the government stands ready to support disaster risk transfer initiatives that lighten the burden on government. I urge other organisations such as the World Food Programme and other international and local civil societies to come on board to help expand the ARC insurance coverage in Zambia by partnering with my government to take up replica and micro insurance,” the Acting President further stated.

The adverse impacts of climate change and climate variability caused droughts in Zambia in 2021 and 2022 and the substantial lack of rain impacted crop production resulting in severe food insecurity in districts in the southern and western parts of the country.

The Government of Zambia had earlier signed a memorandum of understanding with the African Risk Capacity Group to participate in the 2021/2022 drought risk pool to better deal with the drought and protect vulnerable populations from its adverse impacts. The Zambian Government made a premium budgetary allocation from its national budget and sought additional premium financing support from the Swiss Agency for Development and Corporation and the African Development Bank to maintain the insurance policy for the 2021/22 agriculture season.

“The African Development Bank is pleased to see this African Risk Capacity Group payout to the Government of Zambia. We expect this to be the beginning of continued support to help the country enhance their resilience to the shocks of climate change. The Bank’s support has brought assistance to farming communities hit hard by drought and poor crop yields, by enabling Zambian authorities to provide them with cash payments and sustaining them from eating their seeds as food, quitting farming as livelihoods, or migrating in search of food and non-existent jobs,” said AfDB Vice President for Agriculture, Human and Social Development, Dr. Beth Dunford.

“ARC offers an African solution to one of the continent’s most pressing challenges, the shocks of climate change, transferring the burden of climate risks away from governments to ARC through sovereign insurance,” said Dr Abdoulie Janneh, ARC Group Deputy Board Chair and ARC Ltd Board Chair. “The Government of Zambia is our privileged partner, and we stand with them to ensure their vulnerable population and livelihoods are protected against extreme weather-related disasters,” he added.

The funds disbursed to the Government of Zambia will also boost the local economy and help communities build back better.

“We are extremely honoured by the trust vested in us by the Government of Zambia. We are confident that this payout will assist the country in supporting its affected population to recover from the effects of the drought and prevent them from resorting to negative coping mechanisms,” said United Nations Assistant Secretary-General and ARC Group Director General, Ibrahima Cheikh Diong.