The African Development Bank Group (AfDB) has unfolded its planned $1 billion facility to provide insurance to more than 40 million farmers across the continent against severe impacts of climate change.
The announcement was lauded by the World Food Programme (WFP), development agencies, insurance companies, and the private sector during a side event at COP28 in Dubai.
Dr. Akinwumi Adesina, the African Development Bank President said the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) aims to mobilise $1 billion of concessionary financing, high-risk capital, and grants to support the African insurance industry.
The Facility, he added, is designed to protect farmers and countries against catastrophic weather-related events and to stimulate private sector investment in agriculture by mitigating risks.
“We have to support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events like drought, floods and pest infestation… We need to ensure that farmers and actors along the agricultural value chain are covered by insurance at scale,” Dr. Adesina said, adding that the successful rollout of the facility will depend largely on partnerships such as the World Food Programme to deliver services to clients.
Cindy McCain, Executive Director of the World Food Programme said, “The climate crisis is affecting agricultural communities across Africa. This programme will play an important role in protecting smallholder farmers, pastoralists, and small businesses from climate shocks.
“We are excited about our growing partnership with the African Development Bank, which is allowing us to offer more support to governments, as they respond to the climate crisis”.
At the presentation, the United Nations Assistant Secretary General and Director General of the African Risk Capacity Group, Ibrahima Diong, and Bogolo Kenewendo, the Special Advisor to the United Nations Climate Change High-Level Champion, said ACRIFA will boost investment and resilience in the continent’s agri-food systems.
This was followed by a panel discussion on how large-scale deployment and use of quality, climate risk-related insurance solutions can boost Africa’s food security, and open business opportunities for the global insurance sector.
It was moderated by Dr Victor Oladokun, the Senior Communication and Stakeholder Engagement Advisor to the Bank President.
The Head of Government Relations at the One Acre Fund, Michelle Kigari, said, “Insurance is critical in building resilience, meaningful resilience, for Africa’s farmers,” and added, “Farmers are not able to bounce back from some shocks if they don’t have a safety net, and insurance helps build that safety net.”
Dr. Beth Dunford, AfDB Vice President for Agriculture, Human and Social Development, said, “The market for insurance in Africa is massive. This Facility will bring the key players together to make it easier for scale to be achieved, to make connections between players, and for insurance to reach more of the continent’s most vulnerable”.
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