Lack of crop insurance schemes hurts farmers

By John Oyuke

The African Insurance Industry has been asked to develop affordable and reliable crop and livestock insurance schemes for farmers.

Deputy Prime Minister Musalia Mudavadi said though crop failure and livestock loss due to natural and man-made disasters is ever-present in Africa, there is no adequate insurance coverage for such risks.

"It is disheartening that agricultural and livestock insurance products are not well developed in Africa, yet this is the mainstay of our economies," he said.

He urged players in the industry to take bold steps and design products that go beyond the traditional risks the market is accustomed to.

Mudavadi, who is also the Minister for Local Government, spoke during the opening of the 15th African Reinsurance Forum in Nairobi, on Monday.

The theme of the two-day Forum is "Credit and Political Risks Insurance in Africa."

Boost confidence

The African Insurance Organisation (AIO) established the forum to encourage contacts among African insurers, re-insurers and brokers within the continent.

The forum is also open to international insurers and brokers. President of AIO, Israel Kamuzora said the objectives of the forum are promotion of inter-African co-operation and development of a healthy insurance and re-insurance industry.

He said reinsurance experts would look at challenges posed by the global economic slowdown and suggest ways of navigating through them.

Mudavadi said development and introduction of appropriate insurance products would boost confidence of companies to exploit business opportunities in agriculture.

Potential investors, he added, do not see Africa as a destination where investments are safe, due to bad governance, instability and high political and credit risks.

"We witnessed this during our last election, memories of which are still fresh in our minds," said Mudavadi.

He said the fact that traditional insurance does not cover political risks became apparent after the post-election violence, when a number of insurance firms repudiated claims saying they were not covered.