The country of Madagascar is the latest to benefit from a payout under its parametric drought insurance coverage from the African Risk Capacity (ARC), with almost $800k to be disbursed to the government.
The African Risk Capacity Group and the African Development Bank presented the Government of Madagascar with a US $797,049 cheque as an insurance payout after delayed rains during the 2021-2022 agricultural season drove drought conditions across the country, particularly in the Grand South.
The payout comes from parametric drought insurance that Madagascar took out under the African Development Bank’s flagship programme ADRiFi, which financed 50% of the 2021/2022 insurance premium for sovereign drought risk transfer.
Madagascar’s payout comes on the heels of other parametric insurance products getting triggered by drought across the continent of Africa.
The African Risk Capacity (ARC) will make at least a US $14.2 million payout to benefit the people of Malawi, after the country’s parametric drought insurance coverage was triggered.
The African Risk Capacity (ARC) has paid out and already disbursed US $5.3 million to the Government of Zambia after the African nations parametric drought insurance coverage was triggered.
“I would like to thank the African Risk Capacity Group, the African Development Bank, the German government, as well as multi-donor partners such as Switzerland and the United Kingdom, who provided premium support to the Government of Madagascar to enable insurance uptake. Your support to ARC and to countries across the continent is crucial to enable us to sustain membership in this vital insurance mechanism,” commented Mr Tahina Razafindramalo, Minister of Digital Development, Digital Transformation, Posts, and Telecommunications.
“Madagascar is, unfortunately, one of the African countries hardest hit by the impact of climate change. However, the government’s foresight to take out drought insurance meant that we were able to work together to develop a pre-emptive contingency plan, detailing how the payout would be used. The swift release of funds means the most-affected communities can now be assisted as a matter of urgency,” added Lesley Ndlovu, CEO of ARC Limited, the insurance affiliate of the ARC Agency.
“This is the third insurance payout via the African Disaster Risk Financing Programme and ARC to the Government of Madagascar. The combined total of more than $13.5 million to boost the government’s ability to provide services that are keeping thousands of vulnerable people from food insecurity or migrating in search of food and work, demonstrates the Bank’s sustained commitment to building African nations’ resilience to climate change,” Dr Beth Dunford, African Development Bank’s Vice President for Agriculture, Human and Social Development also said.
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