Insurance comes to rescue in Mali and Madagascar after climate disasters

Insurance comes to rescue in Mali and Madagascar after climate disasters

African Risk Capacity, through ARC Replica, has paid out $7.1m to drought-affected regions of Mali. The news comes days after ARC made payments in Madagascar after the recent cyclones.

The UN World Food Programme (WFP) welcomes a $7.1m climate risk insurance payment in Mali which has helped support 204,000 people in drought-affected regions of Bandiagara, Gao, Kayes and Segou.

With a population already struggling with the effects of persistent conflicts, political instability, and the socioeconomic impacts of Covid-19, this first-ever climate risk insurance payment in Mali will help WFP provide emergency and resilience-building support in a timely manner to those most vulnerable to climate extremes from March to May 2022.

WFP’s response will complement that of the government of Mali, which will also receive insurance compensation from ARC Replica for climate shocks. Both WFP and government response plans have been prepared jointly and will be implemented in a coordinated manner to achieve impactful results

“The impact of poor rains is clearly visible in affected communities and could prove devastating for many families. Cereal production has decreased, and pasture and water for livestock has shrunk, forcing people to sell off their livestock,” said Sally Haydock, WFP’s country director and representative.

“This pay out comes at a vital time – helping families adapt to most severe impacts of climate change and preserve their livelihoods” she added.

In 2021, Mali experienced the most severe lack of rains in five years, caused by periodic dry spells and low rainfall, all of which have compromised the country’s agricultural output, putting 1.9 million people across the country at risk of severe food insecurity – mostly in the regions of Kayes, Gao, Mopti, Segou and Timbuktu.

“The government strategy is to provide half rations to populations in food crisis situations to contribute to national solidarity. Our common interest is to always work together to relieve the populations affected by drought and strengthen their resilience to climate shocks, with innovative solutions such as those offered by the ARC mutual insurance company,” affirmed Dicko Bassa Diane, deputy minister commissioner of the Food Security Council.

With this climate insurance payment, WFP will provide early food assistance through cash transfers to 161,000 women, men and children affected by climate shocks. More than 20,000 children aged from six to 23 months, and pregnant women and breastfeeding mothers, will receive nutritional support and services. To reinforce communities’ resilience to climate shocks, 23,000 people will benefit from community asset building programmes such as pastoral wells, water towers and fishponds that will help diversify their production and livelihoods and reduce the impact of future rains deficiencies.

In Mali, WFP has been subscribing to the ARC Replica climate insurance policy since 2017 to finance early response in case of drought. In 2021, WFP’s insurance premium was funded by the US Agency for International Development (USAID) and the government of Germany.

Meanwhile, tropical cyclone Emnati made landfall in Madagascar last week, the fourth tropical storm in as many weeks to hit one of Africa’s most storm-prone countries. WFP said it threatens food security and is an example of how weather extremes will trigger runaway humanitarian needs if we do not tackle the climate crisis.

WFP has stepped up to support the government-led response to Emnati with food and cash assistance, prioritising displaced families in the worst-off locations

The storms – Emnati, Dumako, Batsirai and Ana – have wrecked the island nation, causing widespread damage to agricultural land including the rice crop that was just weeks away from harvest. Cash crops like cloves, coffee and pepper have also been severely affected.

In a country where the majority of people make a living from agriculture, an estimated 90% of crops could be destroyed in some areas of affected regions. The back-to-back storms have impacted market supplies, with the potential to send food prices soaring and food insecurity spiralling in the coming months. Forecasts predict another tropical system already forming in the southwest Indian ocean.

“What we are seeing in Madagascar is extreme climate impacts – a series of storms and prolonged drought affecting hundreds of thousands of people,” said Brian Lander, WFP’s deputy director of emergencies. “While WFP is providing essential food in the aftermath of the storms, we need to be equally fast in thinking about how these communities are going to adapt to this new reality.”

While WFP is in a race against time to assist those affected, its longer-term climate adaptation work helps communities prepare for, respond to and recover from climate shocks and stresses. For example, WFP’s integrated risk management in the districts of Ambovombe and Amboasary last year reached 3,500 smallholder farmers with insurance, savings and climate-adapted agriculture practices training. The programme saw a $350,000 payout during the rainy season and a US$157,500 payout during the dry season in 2021. Such programmes need to be scaled up, especially for communities on the frontlines of the climate crisis.

The world over, the climate crisis continues to drive global hunger. In 2020, extreme weather contributed to most of the world’s food crises and was the primary cause of acute food insecurity in 15 countries. WFP’s effective and scalable solutions, especially in fragile environments, help vulnerable communities adapt to the harsh reality of the climate crisis and preserve development gains.


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