Pre-occupation with Ukraine risks hiding downturn across African markets, but insurers still have opportunities for growthCredit: Shutterstock/Alexcpt_photography

Pre-occupation with Ukraine risks hiding downturn across African markets, but insurers still have opportunities for growth

Events in Ukraine have impacted African economies and slowed recovery in the post Covid-19 world.

That was the warning from Davina Milenge-Uwella, principal programme coordinator, climate change and green growth department at the African Development Bank Group, who was speaking as part of the Namibia Women in Finance and Insurance Summit.

With the theme ‘Diversity, equality and inclusion’, the conference was attended by insurance professionals from across the continent in a hybrid format.

Ms Milenge-Uwella warned: “Because of the combined effects of the pandemic and war in Ukraine, there is a projected slowdown across the continent in terms of real GDP growth. This is being exacerbated by climate change.

“Africa is the most affected region by climate change, particularly in the agricultural sector, and there is serious food insecurity across the continent.”

She pointed to the figures which show Africa is one of the lowest emitting regions in the world yet stands to be one of the worst affected by climate change. “There is also an issue with climate justice,” she said. “If you look at the numbers, Africa is responsible for about 3% of global emissions but when you look at vulnerable countries globally, most of Africa is included in the list.”

Looking into individual regions and sectors, Ms Milenge-Uwella showed that southern Africa is suffering more than other regions with a projected -6% in real GDP growth this year. It is worse still in tourism in southern Africa, where growth could be at -12%.

However, support is still not sufficient to bridge the growing gap, she said.

“In 2021, Africa had access to US$20bn of the global total of $632bn of climate finance. Meanwhile, adaptation needs for Africa are estimated at US$331bn through 2030.”

Problems facing Africa also include a lack of bankable climate adaptation and mitigation projects in the pipeline. “One of the problems is that these projects are not being presented in a way that meets the requirements of climate finance funds. Ultimately this means that some of the most vulnerable, who are least able to withstand climate shocks, are the ones without access to funding.”

There is also a gap between national development strategies and climate policies, as well as a lack of incentives to attract private finance.

Generally speaking, Ms Milenge-Uwella said: “Women suffer worst in the face of a climate chock and in the face of climate change.”

Her figures reveal that 70% of Africa’s food is grown by women, but only 15% of agricultural land is owned by women and only 5% of agricultural extension services go to African women farmers.

Looking at energy, 290 million women and girls have no access to electricity in Africa and only 17% of women have access to clean fuel technologies for cooking. Added to that, 90% of African women only have informal employment.

All of this makes women more vulnerable to climate change, warned Ms Milenge-Uwella.

Worse still, there is a lack of financial protection for women. She suggested insurers should consider designing financial products to address the financial needs of women in the informal sector. “Women’s limited access to financial resources makes it impossible to access any form of insurance services,” she said, urging the industry to make a change.

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