2023-05-03 15:56:35
Representatives of the African Risk Capacity (ARC) Group and the African Development Bank (AfDB) presented two insurance payout checks worth a total of $1.5 million to the Government of Madagascar and the World Food Program (WFP) in order to support the country’s recovery following the passage of tropical cyclone Freddy, we learned from an AfDB press release sent to the press.
According to the document, the government of Madagascar received $1.2 million and the World Food Program $300,000. These funds were disbursed as part of the ARC Replica initiative, an innovative risk financing solution extended to humanitarian organisations.
The winds and rain that accompanied Tropical Cyclone Freddy, hit the east coast of Madagascar on February 21, 2023 and caused loss of life and livelihoods, worth 481 million dollars, recalled the source cited above.
“We are aware that Madagascar is prone to climatic disasters, the frequency and intensity of which have continued to increase in recent years. The damage caused is more violent and the associated costs are increasingly high. As such, the Malagasy government is ready to take the necessary measures to pursue its commitment to ensure the sustainability of this insurance mechanism as an instrument adapted to the context of the country’s vulnerability to climatic hazards”, declared, in the text, the Malagasy Minister of Economy and Finance, Rindra Hasimbelo Rabarinirinarison.
As part of building resilience once morest future tropical cyclones, the government and the World Food Program have taken out two separate insurance policies during the 2022/2023 hurricane season with ARC Limited, the insurance subsidiary of ARC Group. , an international finance and consulting firm, further informed the official memo.
The country’s participation in the ARC risk pool was made possible through the Africa Disaster Risk Financing (ADRiFi) Program, which paid its insurance premium. Through ADRiFI, a collaboration between the African Development Bank and ARC Group, several eligible African governments are able to participate in ARC risk pools. Contributions from the UK and Swiss governments, through the bank-managed ADRiFi Multi-Donor Trust Fund, paid insurance premiums on behalf of Madagascar.
“We are delighted to make this payment to the Government of Madagascar to reach the most vulnerable communities and help the country rebuild,” said Lesley Ndlovu, Executive Director of ARC Limited. “Our work with Madagascar over the years continues to prove the value of sovereign insurance as a valuable tool in building a country’s resilience to climate threats,” he added.
According to the same source, the payment of this insurance indemnity comes as Madagascar rebuilds following suffering several costly climatic disasters. These have eroded some of the development gains recorded by the country.
As of March 10, 2023, Madagascar’s National Office for Risk and Disaster Management reported 10 deaths due to Freddy. More than 120,000 people were affected, of whom at least 45,000 were displaced and more than 10,300 homes and schools were destroyed.
The head of the African Development Bank’s country office for Madagascar said that “the bank, through the ADRiFi program, has helped the Malagasy government to pay insurance premiums amounting to 3.5 million dollars. These subscriptions generated a total disbursement of $15 million from ARC Group in the form of indemnity payments”.
“It is gratifying to know that the amount mobilized is more than four times greater than the premiums paid and, even better, that it has benefited 385,589 vulnerable households,” added Adam Amoumoun.
The funds will enable cyclone-affected communities to avoid consuming agricultural seeds as food, selling agricultural tools or migrating in search of work and food.
“The increased frequency and intensity of climate shocks exacerbate the vulnerability of populations, particularly in the southern and eastern regions of Madagascar,” said WFP Madagascar Representative Pasqualina Di Sirio. While WFP provides rapid assistance to those affected, we also look forward to using our experience and expertise to craft long-term solutions in Madagascar to build the resilience of the population. »
“WFP supports insurance and assistance schemes for affected people in order to strengthen the capacity of populations to face the climate crisis”, she added in remarks relayed by the press release.
Madagascar was the first country to enroll in ARC’s tropical cyclone insurance program since its launch in November 2020. During an active cyclone, ARC provides daily real-time tracking information on the strength of the storm and potential impact areas to help participating countries evacuate people in danger. This alert system enabled Madagascar to evacuate 7,000 people before Freddy descended on the country.
Recall that in 2022, the ARC Group paid $10.7 million to Madagascar following tropical cyclone Batsirai, which had been deadly.
Moctar STAYED / VivAfrik
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