Zimbabwe's drought resilience boosted by US$31.8 m...

Zimbabwe's drought resilience boosted by US$31.8 million ARC insurance payout

Staff Reporter

In a major boost to Zimbabwe's drought resilience, the African Risk Capacity has paid out US$16.8 million in drought insurance claims, providing critical support to over 508,000 vulnerable households across 27 districts.

The payout is part of a larger US$31.8 million package including contributions from replica partners.

Finance Minister Mthuli Ncube on Thursday hailed the ARC drought insurance payout, which he said would benefit over 508,000 vulnerable households in 27 districts across Zimbabwe.

Speaking at the payout ceremony in Harare, Ncube expressed his gratitude to the ARC Group, UN World Food Programme, Start Network, and other development partners for their support in mitigating the effects of drought in Zimbabwe.

"This payout is a testament to the power of innovative disaster risk financing solutions," Minister Ncube said.

"We are proud to be part of the ARC Agency, which has proven to be a quick-win solution for disaster risk management and financing in Africa."

The payout is a result of Zimbabwe's participation in the ARC drought insurance risk pool for the 2023/2024 agricultural season. The country paid a premium of US$1 million and received a payout of US$1.4 million in the 2019/2020 season, which benefited over 180,000 households.

Minister Ncube commended the ARC for its sovereign products, saying they would be employed to mitigate against natural disasters. He also expressed appreciation to the African Union for establishing the ARC Agency.

"The insurance payout will contribute immensely towards complementing the early drought response intervention measures which Government has put in place," Ncube said.

"No household will suffer from hunger, and we are confident that this payout will strengthen our nation's resilience against climate-induced adversities."

The payout is complemented by payouts to replica partners, including World Food Programme and Start Network, amounting to US$6.1 million and US$8.9 million, respectively. The total payout of US$31.8 million will be distributed to vulnerable households in 27 districts across the country.

The Minister acknowledged the challenging 2023/24 agricultural season, characterized by severe El Niño-induced drought conditions, and expressed gratitude to development partners for their support.

"We are proud to be part of this innovative solution, and we look forward to continued support from our partners," Ncube said.