•Farmers express fear of diversion
B Henry Uche, mercy4henryuc@gmail.com
African Development Bank Group (AfDBG) has presented its planned $1billion facility to provide insurance coverage to more than 40 million farmers across the continent against severe impacts of climate change.
The facility was widely lauded by the World Food Programme (WFP), development agencies, insurance operators and the private sector at the ongoing Conference of Parties (COP28) in Dubai.
The bank’s President, Dr Akinwumi Adesina, said the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) aims to mobilise $1 billion of concessionary financing, high-risk capital and grants to support the African insurance industry.
The Facility is designed to guard farmers and countries against catastrophic weather-related incidents and to stimulate private sector investment in agriculture by mitigating risks.
Adesina had on a sidelines said, “Over 97 per cent of farmers in Africa do not have agricultural insurance. Their only insurance is to pray.”
“We have to support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events like drought, floods and pest infestation. We need to ensure that farmers and actors along the agricultural value chain are covered by insurance at scale,” Adesina said.
The ADBG chief revealed that over 97 per cent of farmers in Africa do not have agricultural insurance, instead they’re fond of praying over everything even things that ought not to be prayed for. “Their only insurance is to pray. When they plant that it will rain. Pray when they harvest that there will no be rains or pest devastation and pray when they market their crops that prices will not collapse.”
“The eyes of more than 40 million smallholder farmers in Africa are on us. Let us make ACRIFA the answer to their prayers,” he implored.
He affirmed that ACRIFA will systematically support the African insurance industry to unlock financing for investments in climate-smart and green technologies.
“It will strengthen local insurers and foster integration with national and international reinsurers.”
Unveiled at the Africa Climate Summit held in Nairobi in September, ACRIFA brings together governments, development agencies, the insurance sector and the private sector. The successful roll out of the facility will depend largely on partnerships such as the World Food Programme to deliver services to clients.
“The climate crisis is affecting agricultural communities across Africa. This programme will play an important role in protecting smallholder [farmers], pastoralists and small businesses from climate shocks,” said Cindy McCain, Executive Director of the World Food Programme.
“We are excited about our growing partnership with the African Development Bank, which is allowing us to offer more support to governments, as they respond to the climate crisis,” she maintained.
At the forum, the United Nations Assistant Secretary General and Director General of the African Risk Capacity Group, Ibrahima Diong and Bogolo Kenewendo, the Special Advisor to the United Nations Climate Change High-Level Champion, said ACRIFA will boost investment and resilience in the continent’s agri-food systems.
Panelists discussed on how large-scale deployment and use of quality, climate risk-related insurance solutions can boost Africa’s food security, and open business opportunities for the global insurance sector.
The Head of Government Relations at One Acre Fund, Michelle Kigari, said, “Insurance is absolutely critical in building resilience, meaningful resilience, for Africa’s farmers. Undoubtedly, farmers are not able to bounce back from some shocks if they don’t have a safety net, and insurance helps build that safety net.”
Similarly, the Founder of Takaful Insurance Group of Africa and ACRIFA Senior Advisor, Hassan Bashir urged insurance companies to consider taking on large-scale group clusters of farmers for insurance cover, saying, “Africa is fed and employed by the agriculture sector, yet we define it as a risky business. Agriculture is not risky—life depends on it.”
Commenting on the , the CEO of Amini AI, an artificial intelligence startup focusing on Africa’s environmental data scarcity, Kate Kallot, asserted, “Once you have data, you have transparency, and transparency creates trust. If you are able to bring that transparency across the entire value chain, transparency, then you will be able to bring trust and better investors, better support for the farmers,”
Moreover, the Managing Director/ CEO of Insurer Training Centre- Zep-Re Academy and Board member of Acre Fund, Hope Murera, pointed towards quality, accurate and reliable data as a big challenge to many investors across sectors in Africa. “We are doing our bit as the Zep-Re Academy, but it is not enough. We talked about data. How do we get data so that we price correctly?” he queried.
For Bridget Gainer, Global Head of Public Affairs & Policy for Aon, one of the world’s largest risk management companies, coming together is success, but moving together is progress, while Beth Dunford, Bank Vice President for Agriculture, Human and Social Development averred, “The market for insurance in Africa is massive. This facility will bring the key players together to make it easier for scale to be achieved, to make connections between players, and for insurance to reach more of the continent’s most vulnerable.”
However, a quick telephone interview with a few Nigerian farmers in the Micro, Small and Medium Scale space, who pleaded anonymity expressed fear of mismanagement and absence of the transparency in the process.
An agropreneur in primary agricultural practice said, “It’s not enough to make pronouncement. Nigeria is part of Africa and would receive its portion of this $1bn, but as we all know- our endemic problem of corruption would not let farmers and other entrepreneurs in the agricultural value chain to benefit therefrom. Within our country, some times, the government would release funds for the people in different sectors, but the middlemen would divert it to selected group of persons, the reasons are so many, however, hunger in the land is making people do the unimaginable” he bemoaned.
Another farmer in the post- harvest agricultural value chain (name withheld) in pains decried, “We heard about it but then all these offerings go to the wrong hands. Never mind what people read or hears in the news, they’re not accountable nor transparent. Over the years, we have witnessed distributive and Procedural injustice by the so -called leaders when they receive most of this interventions both locally and internationally. It’s so sad they aggravate our plight instead of ameliorating it.”