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State insurance set to cover disasters

By Peter Theuri | February 13th 2020 at 00:00:00 GMT +0300

A farmer inspects the damage caused by floods at Rongai in Nakuru county in December. [Kipsang Joseph, Standard]

Kenya plans to take insurance against droughts and floods amid changing weather patterns that are increasingly threatening the country’s food security.  

The country is set to restart paying premiums next month to the Africa Risk Capacity (ARC), an insurance agency of the African Union that helps member countries mitigate against natural calamities such as floods and drought.

The payments are under a revised, holistic insurance structure. Drought is the largest natural calamity in the sub-Saharan region followed by floods, according to ARC.

Kenya, already a member of the ARC, has been inactive for close to three years, last making a payment in 2016.

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The country withdrew payment before it could reach a coverage trigger. ARC is a financing instrument that is used in drought mitigation.

“We paid our first premium to the ARC in 2015. We, however, have not paid for the last two years. At the moment, existing disaster risk financing instruments in Kenya, except ARC, cannot adequately finance medium high-impact disasters and a wider range of disasters,” said National Drought Management Authority (NDMA) Chief Executive James Oduor after a board meeting in Nairobi yesterday.

“The instruments, unlike ARC, also have limited geographical coverage. ARC has a huge potential to finance medium-high impact disasters.”

NDMA provides leadership and coordination of Kenya’s efforts in the management of drought. Some of the other financing instruments are the national budget (through the Civil Contingency Fund and County Governments Emergency Fund), the European Union-funded Drought Contingency Fund, National Drought Emergency Fund, Kenya Livestock Insurance Programme, ACRE Weather Index Crop Insurance and the Kenya Agricultural Crop and Risk Management Project.  

The country last year experienced some of the worst weather conditions, with a prolonged drought followed by raging floods after heavy rains. This saw the country, which is largely dependent on rain-fed agriculture, face a major food crisis.

The situation was worsened by a locust invasion towards the end of the year, which the United Nations’ Food and Agriculture Organisation said needed a combined total of $70 million (Sh7 billion) to eliminate in Somalia, Kenya and Ethiopia.

Africa Risk Capacity African Union
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