Zimbabwe receives US$31.8 million drought relief payout from African Risk Capacity

Staff Writer

Zimbabwe has received a US$31.8 million payout from the African Risk Capacity (ARC) drought insurance scheme to bolster food security efforts amid a challenging agricultural season.

Zimbabwe like its counterparts in Southern Africa, is currently grappling with El Niño-induced severe drought which has impacted millions of farming households, affecting their livelihoods, food security, and economic well-being.

The ARC payout is a result of joint efforts by the government, UN World Food Programme (WFP) and Start Network, who participated in the sovereign insurance risk pool for the 2023/24 agricultural season.

Speaking at the ARC drought insurance payout ceremony, Finance Minister Mthuli Ncube said the insurance payout will be distributed to approximately 508,435 vulnerable households in 27 districts across the country.

“The ARC payout therefore complements government efforts in ensuring food security, and the immediate response is crucial for the resilience of our communities, ensuring that no household will suffer from hunger,” Ncube said.

“I must admit that the 2023/24 agricultural season was particularly challenging, characterised by the severe El Niño-induced drought conditions that have tested the fortitude of our communities and our agricultural sector.”

Speaking at the same event, UN Resident and Humanitarian Coordinator, Edward Kallon, said the payout is a pivotal moment to underscore the compelling investment case to safeguard the indispensable role played by small farmers in achieving Sustainable Development Goals and mitigating the adverse effects of climate change in Zimbabwe.

He said given the increasing frequency and intensity of climatic shocks, investing in prevention, mitigation, and proactive strategies is no longer a choice but imperative.

Kallon said such investments yield substantial returns by mitigating disaster impacts, safeguarding lives, and ring-fence developmental gains.

For Zimbabwe, Kallon said the investments necessitate the development of comprehensive Insurance schemes, strengthening early warning systems and capacity building.

“The severe El Niño-induced drought in Zimbabwe serves as a poignant reminder of vulnerabilities. However, it also presents an occasion to fortify the national resilience framework and platform,” he said.

“Through adherence to the Sendai Framework principles and proactive investments in disaster risk reduction, Africa Risk Insurance can ensure that small farmers, SMEs, and the nation at large are better equipped to confront future adversities. By embracing these strategies, the government of Zimbabwe, the UN system, and cooperating partners can safeguard progress and chart a sustainable development trajectory.”

Zimbabwe became a member of the African Risk Capacity Agency in 2012. The Agency offers innovative disaster risk financing solutions and assists member states develop contingent measures for natural disasters.

This enables countries to strengthen their disaster risk management systems, and to access rapid and predictable financing in the event of a disaster, thereby, ensuring food security and livelihoods of vulnerable populations.

The Minister said this motivated Zimbabwe’s participation in the ARC drought insurance risk pool for the 2019/20 agricultural season, where they paid a premium of US$1 million towards the ARC drought insurance cover.

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