Climate change crises like that currently playing out in southern Madagascar illustrate the crucial need to shift the disaster risk management architecture from reactive to proactive.
The devastating images of emaciated families who have resorted to eating insects and the “unprecedented famine of biblical proportions” predicted by World Food Programme (WFP) Chief David Beasley do not happen overnight.
In the case of Madagascar’s hard-hit Grand South region, this tragedy is several years in the making. Three years of consecutive severe drought, combined with cyclones, dust storms and locust swarms, have wiped out harvests and hampered people’s access to food.
The future is grim, with the World Food Programme (WFP) warning that the number of locals facing phase 5 food insecurity could double by October – not because of conflict. Rather, because of climate change.
Madagascar has become the first famine in modern history to be caused predominantly by climate change. Due to its geographic position, the country is vulnerable to cyclones, floods and droughts which have led to widespread insecurity. It is a dire reality, not only for Madagascar but for the rest of the African continent.
This is particularly because it is unlikely to be the last.
Disrupted weather patterns have a particularly devastating effect on farmers in the developing world who depend on rain-fed, small-scale agriculture for their survival. Unless urgent climate and development action is taken globally and nationally, Africa will bear the “high price” of the impacts of climate change, largely not having contributed to it.
In this scenario, building resilience to climate change through proactive measures has to become a priority for the continent.
It takes far too long for African countries to mobilise the immediate resources they need for relief efforts, to save lives and livelihoods. The traditional disaster response is extremely slow and inefficient and, by the time governments and NGOs have raised enough money to respond meaningfully, the problem has become much worse and more funding is needed.
Enter the concept of parametric insurance, which empowers countries to respond swiftly to the effects of a natural disaster, explains Lesley Ndlovu, CEO African Risk Capacity Limited, a financial affiliate of the African Risk Capacity (ARC), a specialised agency of the African Union (AU), an initiative designed to improve current responses to climate-related food security emergencies.
“ARC Limited’s role as a parametric insurer is critically important in building resilience and ensuring a country is able to bounce back swiftly after a natural disaster,” explains Ndlovu. “Pay outs can filter through as quickly as five to 10 business days because we eliminate the traditional loss adjustment process which is why it normally takes so much time for insurance claims to be paid out. When it comes to disaster risk management, we simply cannot afford a lengthy delay,” explains Ndlovu.
“We’ve seen this in Madagascar where ARC Limited paid out US$2.13 million to cover anticipated losses to livelihoods of its vulnerable population from the crop failure in the just-concluded farming season.
“The pay-out provided immediate support to 600,000 vulnerable people affected by the drought so that they were not forced to resort to short-term solutions, with long-term negative effects like eating their seeds, selling their farm implements and migrating in search of food.”
The ARC pay-out is the result of drought insurance taken by the country with the support of the African Development Bank through its flagship programme, Africa Disaster risk Financing (ADRiFi) programme, which financed 100% of the 2019/2020 insurance premium for sovereign drought risk transfer for Madagascar.
Essentially, the insurance mechanism supports the implementation of the National Disaster Risk Management Policy and Strategy at a national level, particularly the promotion of financial resilience to climatic hazards.
“Our purpose in working with Member States in Africa to provide disaster risk insurance is targeted at promoting resilience and providing financial protection to the vulnerable population when perils occur, and swiftly. Our focus has to be expanding this influencer across Africa as the impacts of climate change continue to hit Africa,” explains Ndlovu.
Today, Beasley’s call to hold back the tide of climate change and save lives is for Madagascar. Tomorrow it will be for somewhere else.
“We need broader collaboration between private and public sector to solve the climate change disaster response problem our continent faces. The problem is so big, that all of us have a role to play,” adds Ndlovu.
With the support of the United Kingdom and German Government, ARC Limited has been equipped to help the member states of the African Union reduce the risk of loss and damage caused by extreme weather events affecting African populations by providing, through sovereign disaster risk insurance, targeted responses to natural disasters in a more timely, economical, objective and transparent manner.
“But there’s so much more work that still needs to go into reaching as many people as possible to help build the resilience of local communities and ensure they have the means to bounce back whenever they are impacted by a natural disaster,” concludes Ndlovu.