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United Nations and African Union Urge African Nations to Prioritize Disaster Insurance.

The United Nations (UN) and the African Union (AU) are urging African nations to prioritize investments in disaster insurance to mitigate the escalating costs associated with climate change-related disasters. This call to action underscores the increasing frequency and severity of natural calamities across the continent, which have led to significant economic and human losses.

In a joint call to action, the United Nations (UN) and the African Union (AU) have emphasized the critical need for African countries to invest in disaster insurance to better manage the financial impacts of climate-related disasters. This appeal, reported by VOA News, highlights the increasing frequency and severity of such events across the continent, stressing the importance of preparedness and financial resilience.

In a speech delivered Thursday in Harare, Edward Kallon, the United Nations resident coordinator for Zimbabwe, urged countries to participate.

“Given the increasing frequency and intensity of climatic shocks, investing in prevention, mitigation and proactive strategies is no longer a choice but an imperative,” he said. “Such investments yield substantial returns by mitigating disaster impacts, safeguarding lives and ring-fencing developmental gains.”

The appeal from the UN and AU highlights the urgent need for proactive financial strategies to address the aftermath of natural disasters. Africa has experienced a surge in climate-related incidents, including floods, droughts, and cyclones, which have devastated communities and strained national budgets. These events not only disrupt livelihoods but also hinder long-term development efforts.

The economic toll of natural disasters is profound, often leading to long-term setbacks in development. The lack of insurance means that many African nations must rely on international aid and loans to rebuild, which can strain their economies further. Investing in disaster insurance can provide a more sustainable and autonomous way to manage these risks.

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Zimbabwe received an insurance payout of $32 million from the AU’s African Risk Capacity agency, (ARC), for the devastation the country suffered from the El Nino-induced drought.

“ARC’s collective goal is to enhance Africa’s resilience by providing Africa Union member states with tailored services to cover risks such as drought, tropical cyclones, floods, and disease outbreaks and to devise sustainable risk financing solutions,” said Anthony Mathae Maruping, chairman of the African Risk Capacity group board.

From the $32 million payout, Zimbabwe’s government received $16.8 million, while about $15 million went to two aid organizations: the Start Network and the World Food Program.

As climate change continues to pose significant threats to the continent, the UN and the African Union’s advocacy for disaster Insurance underscores the urgency of building a more resilient Africa. This strategic investment is seen as a critical step in ensuring that African nations can withstand and recover from the increasing number of climate-related disasters, ultimately protecting their people and economies from severe losses.

ARC Ltd is the private-sector arm of the ARC Agency, established as a specialized agency of the African Union (AU) to help Member States improve their capacities to plan for and respond to extreme weather events and natural disasters, therefore protecting the food security of their vulnerable populations, according to their website.

It was launched by a 2012 treaty with 32 signatories and joins a small but growing group of “risk pooling” initiatives around the world (others are the Caribbean Catastrophe Risk Insurance Facility and the Pacific Risk Pool).

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Eight countries, including Kenya, Malawi and Zimbabwe, have taken drought insurance in ARC’s first three years in operation. Total coverage in the second year for seven nations was $178 million. Six countries (Burkina Faso, the Gambia, Mali, Mauritania, Niger, and Senegal) are currently on board for the annual period that runs through mid-2017.

Donor and WFP support for ARC is expected to continue. During the COP21 climate summit in December 2015, ARC announced more than $150 million in new pledges from countries including Canada, France, Germany, United Kingdom and the United States.

Disaster insurance can offer immediate financial relief in the aftermath of a catastrophe, enabling quicker recovery and reconstruction efforts. It also provides a safety net that can help protect vulnerable populations and critical infrastructure.


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