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INTERNATIONAL Finance Corporation (IFC), a member of the World Bank Group, has partnered with the Insurance and Pension Commission of Zimbabwe (Ipec) to develop a new agriculture insurance product meant to protect smallholder farmers from climate-change related losses.
The development comes at a time when Zimbabwe and the rest of the world have started experiencing the adverse impact of climate change.
The baleful effects of the shift in weather patterns are threatening the viability of smallholder farmers whose livelihood is largely dependent on agriculture.
Agriculture is a significant contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about eight percent to Gross Domestic Product.
However, there are currently limited insurance products in the country specifically designed to protect smallholder farmers.
“One of our key roles as the regulator is to develop the insurance sector in Zimbabwe,” said Ipec Commissioner, Dr Grace Muradzikwa.
“This partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events such as drought, floods, heavy rainfall and heat waves.”
In sealing the partnership with IFC, Zimbabwe’s insurance regulator, said the move will create a market for agricultural insurance products, which will protect smallholder farmers from weather-related crop damage and other shocks.
“Through the partnership, IFC will assess the risks smallholder farmers face, how they are coping with those risks, and will gauge the farmers’ appetite for agricultural insurance to protect their livelihoods,” reads a joint statement issued by the two organisations last Thursday.
“IFC will also help Ipec develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers.”
Additionally, IFC is expected to facilitate knowledge exchanges to help Zimbabwe’s insurance providers learn best practices from more developed agri-insurance markets.
Given the strategic role of agriculture to Zimbabwe’s economy, the shift in weather patterns poses a lot of risks, which are becoming less predictable, said Adamou Labara, IFC’s country manager for Zimbabwe.
“IFC’s partnership with Ipec will reduce the risks for Zimbabwe’s farmers by developing the foundation of agriculture insurance in the country,” said the official.
“Supporting the agribusiness sector is an important part of IFC’s strategy to promote private sector growth across Africa.”
The Zimbabwe project will draw on the experience of the Global Index Insurance Facility (GIIF), through which IFC has supported the growth of agriculture/climate insurance markets in Cameroon, Cote d’Ivoire, Mozambique, Nigeria, Senegal, Zambia, and elsewhere. GIIF is a multi-donor programme managed by the World Bank Group.
It was created to address the scarcity of affordable insurance protection against weather and catastrophic risks in emerging countries.
Ipec develops agricultural insurance solutions that promote sustainable agriculture practices and benefit Zimbabwe’s smallholder farmers. By increasing the penetration of agriculture insurance, Ipec expects the new programme to speed up the adoption of more resilient and sustainable agriculture practices and boost livelihoods and food security.
IFC’s Advisory Services programmes in Zimbabwe are also helping to strengthen the country’s tourism, digital financial services and SME financial services sectors.
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