By Anyway Yotamu
In an exciting development, the Africa Risk Capacity (ARC) has been reported to have intention to sign a Drought Response Cost Insurance Policy Agreement with Zimbabwe.
This was said by Senator Monica Mutswangwa who is the government spokesperson on Tuesday the 3rd of December 2019 during a post cabinet briefing in Harare.
“Following presentation to the Cabinet by the Minister of Finance and Economic Development, Professor Mthuli Ncube, Cabinet approved the signing of the Insurance Policy Agreement between Africa Risk Capacity Limited (ARC Ltd) and the Government of Zimbabwe, as well as the Memorandum of Understanding between the Government of Zimbabwe, the World Food Programme and ARC Limited,” Minister Mutsvangwa said.
The African Risk Capacity Agency seeks to provide participating member States of the African Union with access to financial resources to help them to respond to extreme weather events.
The agency has called for the establishment of an affiliated financial entity, the African Risk Capacity Insurance Company Limited, to provide insurance coverage, risk pooling and transfer services to ARC member states.
Cabinet was informed that Government, through Treasury, would purchase a drought insurance premium of US$1 003 571, which will unlock a maximum coverage of US$5 345 668,00. Furthermore, the World Food Programme (WFP) will pay a premium amount of US$200 000 which will unlock a maximum coverage of US$1 065 329,00 for this coming 2019/20 season.
“Cabinet notes that the country will benefit in terms of ARC coverage of drought by preparing and putting in place necessary measures towards drought mitigation and early response to save the vulnerable populace,” Mutsvangwa said.
The African Risk Capacity (ARC) is a Specialised Agency of the African Union established to help African governments improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters.
Through collaboration and innovative finance, ARC enables countries to strengthen their disaster risk management systems and access rapid and predictable financing when disaster strikes to protect the food security and livelihoods of their vulnerable populations.
The African Risk Capacity is comprised of two entities: the African Risk Capacity Agency and the ARC Insurance Company Limited. Together, they provide ARC Member States with capacity building services and access to state-of-the-art early warning technology, contingency planning, and risk pooling and transfer facilities.