The African Development Bank Group (AfDB) made a resounding announcement at the ongoing Cop28 in Dubai, presenting a landmark initiative poised to change the landscape for African farmers.
The institution unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), a $1 billion facility aimed at safeguarding more than 40 million farmers across the continent against the severe impacts of climate change.
This initiative, praised by a consortium of stakeholders including the World Food Programme (WFP), development agencies, insurance companies, and the private sector, marks a decisive step in tackling the escalating challenges faced by Africa’s agricultural sector due to climate variability.
Dr Akinwumi Adesina, president of the African Development Bank, underscored the urgency of supporting farmers in the wake of intensifying extreme weather events such as droughts, floods, and pest infestations.
“We have to support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events,” he stated, emphasising the critical need for insurance coverage at scale for those involved in agriculture.
Adesina highlighted the staggering statistic that over 97% of African farmers lack agricultural insurance, relying solely on hope when planting, harvesting, and marketing crops.
ACRIFA aims to fill this void by mobilising funds to support the African insurance industry, offering protection against catastrophic weather-related events while also incentivising private sector investment in agriculture.
The World Food Programme’s executive director, Cindy McCain, hailed this programme as crucial in shielding smallholder farmers, pastoralists, and small businesses from the ravages of climate shocks.
She expressed excitement about the growing partnership between the World Food Programme and the African Development Bank, enhancing support to governments in their response to the climate crisis.
During the presentation, several experts emphasised the significance of quality climate risk-related insurance solutions in bolstering Africa’s food security and expanding opportunities for the global insurance sector.
Notably, there were calls for insurance companies to consider embracing large-scale clusters of farmers under insurance cover, stressing that agriculture, a life-sustaining sector, should not be considered risky.
However, challenges persist, primarily centred around the acquisition of accurate and reliable data, a crucial factor in pricing insurance correctly. Experts stressed the need for collaboration and leveraging collective strengths to overcome this hurdle.
Dr Beth Dunford, the bank’s vice president for agriculture, human and social development, highlighted the vast potential of this facility in uniting key players to streamline insurance access for vulnerable populations across the continent.
As ACRIFA takes centre stage with its promise to shield millions of farmers from climate risks, the consensus among stakeholders is clear: collective action and collaboration are paramount to realising the ambitious goals of this initiative.