Malawi buys K21bn drought insurance
Malawi is poised to effect its fastest initial disaster response after government recently bought a drought insurance policy that will provide it with up to K21 billion (about $28.5million) once a drought strikes.
The insurance has been procured from the African Risk Capacity (ARC) Insurance Company and seeks to give it a source of funds through the normal insurance claims in the face of droughts.
Department of Disaster Management Affairs (Dodma) communications officer Jeremiah Mphande said the new policy will give impetus to disaster response which has generally being slowed by an ad hoc accessing relief funding.
“The overall objective of the drought insurance policy is to provide immediate funds for implementing a drought emergency response programme. These funds will bridge the gap between the end of a failed season and the time when emergency support starts coming in from donors.
“This will ensure that affected households are provided with humanitarian relief assistance quickly before the disaster victims engage in destructive coping mechanisms, which include selling productive assets.”
He said the payouts will be automatic as the insurers use a model that uses satellite rainfall data to monitor the situation, adding that the system has divided Malawi into parts meaning payouts will be effected even when the drought is localised.
Since 1984, Malawi has been experiencing localised dry spells every two years, with an average of 500 000 people getting affected by each dry spell.
Civil Society Agriculture Network (Cisanet) national coordinator Tamani Nkhono-Mvula commended government for securing the fall-back plan, but implored government not to be lured by the apparent comfort zone through relief pay-outs.
He said government should seek lasting solutions to unpredictable weather challenges crippling Malawi’s agriculture sector.
Said Nkhono-Mvula: “If the drought affected all neighbouring countries and many other parts of Africa, even the insurance money may not be enough if that would ultimately mean importing maize from distant countries like Brazil or the United States of America.
“As a country, we need to have a lasting solution to our food shortages, mainly caused by our reliance on rain-fed agriculture. If the government and the private sector collaborated seriously, Malawi can always be food-secure if, for example, we invested in commercial irrigation.” n
