The African Development Bank (AfDB) President, Dr Akinwumi Adesina, has revealed that many African farmers are not insured. He, however, hinted that the African Development Bank Group (AfDB) had planned a $ 1 billion facility to provide insurance coverage to more than 40 million farmers.
According to him, 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. The World Food Programme (WFP), development agencies, insurance operators, and the private sector widely lauded the facility at the ongoing Conference of Parties (COP28) in Dubai.
Adesina had on a sideline 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.
Underscoring the significance of the initiative, the AfDB Boss noted that the farmers reposed much confidence in the institution in unlocking financing for investments in climate-smart and green technologies and, as such, can not afford to let them down.
“The eyes of over 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 climate-smart and green technologies investments.
Unveiled at the Africa Climate Summit held in Nairobi in September, ACRIFA brings together governments, development agencies, and the insurance and private sectors. The successful rollout of the facility will depend mainly on partners 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.
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 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 critical in building meaningful resilience for Africa’s farmers. Farmers cannot 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.”
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 significant challenge to many investors across African sectors. “We are doing our bit as the Zep-Re Academy, but it is not enough. We talked about data. How do we get data to 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 a success, but moving together is progress. At the same time, Beth Dunford, Bank Vice President for Agriculture, Human and Social Development averred that, “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 lack of transparency in the process.
An agropreneur in primary agricultural practice said, “It’s not enough to pronounce. Nigeria is part of Africa and would receive its portion of this $1bn. Still, as we all know, our endemic corruption problem would not let farmers and other entrepreneurs in the agricultural value chain benefit from that place. Within our country, sometimes, the government would release funds for the people in different sectors, but the intermediaries would divert it to a selected group of persons; there are many reasons. However, hunger in the land is making people do the unimaginable,” he lamented.
In pain, another farmer in the post-harvest agricultural value chain (name withheld) decried, “We heard about it, but then all these offerings go to the wrong hands. Never mind what people read or hear 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 these interventions locally and internationally. It’s so sad they aggravate our plight instead of alleviating it.”
