African Development Bank first vice
president and chief cooperating Officer Leautier Frannie says climate disaster
has negatively impacted on a number of countries in eastern and southern
Africa.
Ms Frannie said Zambia has not been
spared from the natural re occurrences, stating that the Kariba dam which is
the main source of hydro power for the national economies for Zambia and
Zimbabwe has been severely impacted with obvious results in power disruptions.
She added that the drought
significantly threatens gross domestic products (GDP) growth in sub-Sahara
Africa, pointing out that in Malawi the drought could have an estimated
adverse effect of four percent on annual GDP.
Ms Frannie was
speaking during a high level panel meeting on climate and disaster risk
financing at the on-going African Development Bank (AfDB) annual meeting in
Lusaka.
Ms. Frannie said such decrease in
productivity destructs economic growth adding that it also
erodes development gains and breaks the resilience of the economies that have
been managed in the last two decades.
“To deal with such risks it requires
additional emergency aid from the international community” she said.
Ms. Frannie said the ARC protects micro
economy disruptions that will be occasioned such as the one Zambia is facing
due to inadequate rainfall.
She revealed that in 2014 ARC made pay
outs to three African countries with Senegal getting 17 million dollars,
Mauritania 6.3 million and Niger got 3.5 to finance the recovery programs.
Meanwhile Kenyan cabinet secretary for
the national treasury Henry Rotich said risk management is key to African
countries.
Mr. Rotich added that Kenya has to
prepare for the ARC premiums in every financial year due to the country’s
vulnerability to shocks such as drought.
“We decided to start buying the
premiums because of the experience we had in the past with tackling risks that
come about when we implement budget.” said Rotich.
Mr. Rotich said besides the ARC, the
country has also passed a national drought management law which requires
setting up funds for risk purposes.
And Ms Leautier Frannie, the first vice
president said such risks cause major budgetary reallocation which disrupts
development planning citing Namibia which reallocated about 60 million dollars
for a multi prone drought relief program to assist over 600,000 people.
She said that AfDB recognises that
Africa can no longer be content with emergency response as it disrupts
reallocation of scarce development resources.
And Senegal minister of Economy and
Finance Amadou Ba said Senegal was one of the first countries to subscribe for
insurance policy from African Risk Capacity (ARC).
Mr. Ba said countries that are prone to
natural occurrences such as drought should be encouraged to subscribe to ARC as
it helps to deal with many shocks.
He said Senegal has bought two premiums
from ARC and is scheduled to buy the third one despite failing to trigger
pay-out from ARC the time it experienced a risk, adding that his country will
continue to support pay-out premiums.
“Senegal joined ARC after experiencing
the first drought in 2011 which negatively impacted on the economic growth of
the country.
And African Risk Capacity
insurance board Lars Thunell said countries must ensure that they subscribe to
the ARC policy adding that the most expensive thing is to wait for an event to
occur and repair the damages.
Mr Thunell said that insurance
companies are interested in preventing potential beneficiaries from using
issuance payments.
He said it is important to scale up the
initiative and expand the ARC to East Africa..
Chair of African Risk Capacity Agency’s
governing board Ngozi Lweala said her organisation represents how African
states are finding African led solutions to extreme weather conditions.
Dr. Lweala said some African countries
namely Niger , Senegal , Gambia, Mali, Mauritania and Kenya have purchased
insurance from ARC ltd adding the company expects 30 countries to be insured by
2020.
“African Risk Capacity (ARC) is also
launching a tropical cyclone insurance product this year and a flood insurance
product in 2017 as part of its effort to increase insurance coverage across
Africa” she said.
African risk capacity signed a letter
of intent and memorandum of understanding with African Development Bank (AfDB)
and conference inter-Africaine des Marches d Assurance (CIMA) respectively
after the high level panel meeting at the on-going AfDB annual meetings.
The letter of intent between ARC and
AfDB marked an announcement of intentions to collaborate in the areas of
planning, preparation and response to extreme weather events.
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