ZIMBABWE must do more to finance agriculture insurance as climate change is now heavily affecting the sector, African Risk Capacity Limited (ARC) chief executive officer Lesley Ndlovu has said.
Speaking to the Daily News yesterday, Ndlovu said the government should be always prepared to deal with the effects of climate change. “Throughout Africa we are having a concentration of droughts, in Eastern Africa and Southern Africa. It is incumbent upon businesses and government to ensure that they take out the necessary insurance policies against these events such that when they occur, the disruption to livelihoods and business is minimised as much as possible.
“Zimbabwe needs to be more prepared for disasters and financing mechanisms need to be set up in advance and well-oiled so that we are prepared to deal with them. “When you look at the economy of Zimbabwe, agriculture is one of the main contributors to the GDP, therefore, if we suffer drought in Zimbabwe it means it will be negatively impacted and as a result we need to protect investments in agriculture,” he said.
The country’s agriculture industry last year grew to US$7,89 billion and the authorities are targeting to grow the sector to US$10 billion by 2025. “The worth of the agriculture sector, and roughly one percent of that on insurance is enough for the size of the agriculture market.
“The government of Zimbabwe is one of our clients and partners within the ARC and we paid a claim of US$2,4 million after the 2019 drought, since that we have been very active in Southern Africa. “What we have seen in Zimbabwe through schemes such as Pfumvudza is where the government itself is playing an aggregation role in including insurance in the financing of agricultural inputs. That is one way of increasing insurance penetration, ensuring that the people who need coverage ultimately get it,” Ndlovu said.
ARC is a mutual insurer of the African Risk Capacity Group which is an agency of the African Union, its mandate is to assist member states to improve the resilience of their populations in the face of climate change.
Meanwhile, last year the government set aside over US$1 million under the area yield index crop insurance pilot project for 30 000 farmers who received Pfumvudza inputs this 2021/22 agriculture season.