Insurers could help African economics recover from losses that threaten food security – Africa Re DMD
The role of insurance in helping African economies recover from losses constantly experienced in agricultural space that threaten food security has been re-emphasised.
Ken Aghoghovbia, deputy managing director/coo, Africa Re who made the observation during a virtual conference on the theme: ‘The Insurance and Agriculture Session Of Cultivate Africa Partnership Dialogue’ said insurers have a critical role to play for African economies to promptly recover from such losses which threaten food security.
Cultivate Africa Dialogue is a well-structured dialogue conceived in order to address the interconnected challenges with a view of providing effective solutions to the threats of COVID-19 pandemic on the Agriculture
Industry in Africa.
Aghoghovbia giving a keynote address during the event noted that only 3 percent of smallholder farmers in Sub-saharan Africa have insurance to protect themselves against these risks.
“Most of the farmers cannot even afford the premiums required to obtain adequate insurance covers and government subsidies, when available, are often limited in scope.”
Aghoghovbia said agriculture is a key economic driver on the African continent, contributing about 15 percent of the continent’s average GDP, which underscores the fact that the performance of the agricultural sector can significantly influence economic development in most Sub-saharan Africa countries.
He however noted sadly that the agricultural sector in Africa is plagued by a number of risks which are inadequately mitigated.
Some of the recent looses across the continent he noted include- the Severe Droughts experienced in Kenya between 2008 and 2011; the Outbreak of Maize Lethal Necrosis Disease which affected maize crop lands in Kenya, Uganda, Tanzania, Rwanda, Congo and Ethiopia between 2012and 2013; the Fall Army Worms that spread to over 44 countries within the continent in 2016; and the Locust Invasion in East Africa between 2019 and 2020, among others.
Aghoghovbia said in line with its mission to support African economic development, Africa Re works with the insurance industry and other partners to develop viable agriculture insurance schemes by providing needed support in the schemes development, technical training and reinsurance capacity.
“Around the continent, there are some success stories of effective partnerships in the Agriculture insurance sector with a great deal of focus on smallholder farmers. A notable example is World Bank’s
Global Index Insurance Facility (GIIF) collaboration with Africa Re.”
In the POST-COVID environment, it will be crucial to develop partnerships with relevant bodies in order to maximize scale, efficiency, skills, and performance, the Africa Re DMD advised.