The African Development Bank Group plans a-$1 billion facility to provide insurance to more than 40 million farmers across the continent against severe impacts of climate change.
The facility was praised by the World Food Programme (WFP), development agencies, insurance companies and the private sector during a side event at COP28 in Dubai.
Adesina 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 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,” he said.
Adesina said over 97 per cent of farmers in Africa do not have agricultural insurance. “Their only insurance is to pray… when they plant that it will rain. Pray when they harvest that there will not be rains or pest devastation and pray when they market their crops that prices will not collapse.
“The eyes of more than 40 million smallholder farmers in Africa are on us. Let us make ACRIFA the answer to their prayers,” he said, adding that ACRIFA “will systematically support the African insurance industry to unlock financing for investments in climate-smart and green technologies. It will strengthen local insurers and foster integration with national and international reinsurers”.
Unveiled at the Africa Climate Summit held in Nairobi in September, ACRIFA brings together governments, development agencies, the insurance sector and the private sector.
The successful roll out of the facility will depend largely on partnerships such as the WFP to deliver services to clients.
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,” Executive Director of the WFP, Cindy McCain, said.
During 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.
The Head of Government Relations at the One Acre Fund Michelle Kigari said, “Insurance is absolutely 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.”
The Founder of Takaful Insurance Group of Africa and ACRIFA Senior Advisor Hassan Bashir urged insurance companies to consider taking on large-scale group clusters of farmers for insurance cover. “Africa is fed and employed by the agriculture sector, yet we define it as a risky business. Agriculture is not risky—life depends on it,” said Bashir.
