ADDIS ABABA- Zimbabwe has blown an opportunity to benefit from African Union drought relief fund after failing to honor its financial commitment with the African Risk Capacity (ARC) despite signing a Memorandum of Understanding, 263Chat has learnt.
Addressing a press conference on the sidelines of the African Union summit in Addis Ababa on Saturday, African Risk Capacity which is a continental arm of the African Union responsible for preparing and responding to natural disasters said Zimbabwe signed a MOU on the 25 February 2013 but failed to pay any premiums effectively meaning the country cannot get assistance when faced with emergencies such as drought.
Quizzed on the amount of Zimbabwe was required to pay, Babatunde Iyanda who is ARC’s Country Engagement Manager said the amount is in the region of $500, 000 per annum.
In contrast, Malawi which paid its parametric drought insurance policy for the 2015/16 agricultural season, received a payout of US$8,1 million dollars in response to drought that hit the country and the rest of southern part of Africa including Zimbabwe.
Iyanda said as an insurance risk pool, ARC’s objective is to capitalize on the natural diversification of weather risk across Africa, allowing countries to manage their risk as a group in a financially efficient manner.
“The initial capital comes from participating countries’ premiums as well as one-time partner contributions.
“ARC works with countries to calculate country premiums and allocate pay-outs to member countries based on predetermined and transparent rules for payment’.
“Countries select the level at which they wish to participate by selecting the amount of risk they wish to retain and financing they would want from ARC for droughts of varying severity. (ARC will provide coverage for other hazards, including floods, at a later date),” said Iyanda.
African Risk Capacity is a specialized agency of the African Union set up to help member states to improve their capacities to prepare and respond to weather events and disasters
The African Risk Capacity (ARC) was established after a realization that climate change increases the risks of hunger and malnutrition of the most vulnerable groups in Africa. According to ARC, Africa will need $15 billion to $20 billion each years through to 2050 for countries to adapt to an increase of 2 degrees Celsius.
Drought remains Africa’s biggest threat with the ARC having spend an average of 36% of all responses between 2002 and 2009 towards drought relief. In 2009 only, World Food Programme (WFP) spend a total of US$2,5 billion (63% of WFP global expenditure), assisting 53 million people in sub-Saharan Africa.