The Parliamentary Committee on Natural Resources has asked government to temporarily withdraw from all disaster insurance engagements following revelations that there will be no claim from K21 billion ($30 million) it bought from a continental agency to ease disaster recovery efforts.
Committee chairperson, Werani Chilenga, said government should stop all the insurance agreements to pave the way for further scrutiny on the issue. He said this during a meeting which Civil Society Network on Climate Change (Cisonec), a coalition of civil society organisations addressing the effects of climate change, organised on Wednesday to engage the committee on national disaster insurance policies.
In May, The Nation reported that government spent K2.9 billion on a disaster risk insurance policy with Africa Risk Capacity (ARC), but failed to access the payout due to failure by public officers to scrutinise policy documents.
The revelations compelled various stakeholders, led by Cisonec, to question government‘s integrity when securing investments and vested interests of market-based solutions for climate challenges.
Cisonec organised the dialogue meeting in reaction to reports that government bought the insurance policy to address impacts of the drought among affected populations in response to the effects of El Nino in the country.
However, it later emerged that despite floods and droughts hitting the country, government could not access the insurance payout estimated at $30 million (about K21 billion) due to some provisions which were overlooked by the government when entering into the agreement.
Chilenga said it was unfortunate that government spent over K2 billion on an insurance policy that in the end turned into a waste of money.
He said: “We advise government to temporarily suspend the disaster insurance policies until proper processes are done. We have lost a lot of money. The reasons which have led us to lose have not been sorted out so we stand to lose out again.”
Chilenga said as a committee, they were informed about the insurance after the agreement was reached, but both the Department of Disaster Management Affairs (Dodma) and Ministry of Agriculture have failed to justify how the decision was authorised.
Minister of Finance Goodall Gondwe told The Nation last week that the government would not rush to decide not to buy weather insurance cover until discussions with ARC are concluded on why they did not honour Malawi’s cover.
Cisonec national coordinator Julius Ng’oma said the dialogue meeting was called after realising the need to consolidate ideas from various stakeholders to warn government to avoid a repeat of the same in subsequent disaster insurance schemes.
“This meeting is part of the process to gather information on what went wrong and how we can effectively contribute towards fixing the loopholes so that such insurance policies benefit disaster affected Malawians,” Ng’oma said.