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Lovemore Chikova
Assistant Editor
Natural disasters have a devastating effect on development and developmental programmes, not only in Zimbabwe, but throughout the world.
In this interview, African Risk Capacity (ARC) chief executive officer Mr Lesley Ndlovu talks about how his organisation, which is affiliated to the African Union, helps governments on the continent to mitigate against the effects of such disasters as droughts and cyclones.
Q: Can you start by briefly explaining what the African Risk Capacity (ARC) stands for and what led to its formation?
A: ARC was set up in 2012 under the auspices of the African Union, in response to the increasing frequency and severity on natural disasters on the African continent. The mission of ARC is to help African countries to better plan, prepare and respond to natural disasters.
ARC operates through two complementary institutions, (i) ARC Agency which is a development Agency that works with countries on risk profiling, contingency planning, capacity building and advocacy, (ii) ARC Ltd, designs and implements insurance solutions against extreme weather for African countries.
Q: What are the objectives of this organisation?
A: Our objective is to increase the number of Africans that are protected by insurance. We current cover about 30 million Africans per year and our target is to be covering over 200 million people per year within the next 5 years.
We provide insurance across three key segments; governments, humanitarian agencies such as the World Food Programme and to small-medium scale farmers.
Q: What has been the effect of disasters on African countries in relation to development and how do help cover the risks?
A: Africa is in general not well prepared for natural disasters. When disasters occur, they have a detrimental effect, resulting in the loss of lives and livelihoods.
The impact can be felt over several years as it takes a long time for infrastructure to be replaced and agricultural productivity to be restored
Q: Which services do you provide to mitigate the effects of such disasters on developmental programmes in member states?
A: ARC Ltd provides insurance against droughts and tropical cyclone. The insurance coverage is parametric, which means that the size of the claim is determined through a model based on satellite data and not actual loss assessment.
The major advantage of using parametric insurance is that it enables us to pay claims early, we typically pay any claims within 10 business days after a loss event. This rapid liquidity facilitates early intervention before a dire situation becomes worse.
Q: In relation to Zimbabwe, what have been your interventions so far and which sectors have you been working with in disaster management?
A: In Zimbabwe, we provide insurance to the government of Zimbabwe. We paid a claim of US$2.4 million after the 2019/2020 drought. We are active in the agricultural sector, where we provide reinsurance capacity and industry training in conjunction with our local partners. We view Zimbabwe as a critical market for our future success as there is a coverage gap in agriculture in a context where agriculture is a major contributor to the economy.
Q: What models do you use in your approaches to managing the effects of disasters?
A: Our models are heavily reliant on satellite data, for example in our drought insurance product. We use satellite data to estimate the level of rainfall in a geographical location, based on this we can estimate crop yields and then the potential economic loss arising from a drought. There are many other models e.g. those that measure the level of moisture in the soil and the evapotranspiration of the plants
Q: The gender question always crops up when it comes to disasters, do you consider any gender mainstreaming when it comes to your responses and assistance to member states?
A: Women are disproportionately impacted by natural disasters and therefore gender mainstreaming is an area of focus. We are able to disaggregate the data on beneficiaries to accurately measure who benefits from the claims that we pay. We have worked with our partners to create insurance programmes that target crops mainly grown by women such a shea butter in Burkina Faso.
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