By Rungano Dzikira
Proactive Zimbabwean Government has received a US$1.5 million pay-out from African Risk Capacity Insurance Company Limited (ARC Ltd) to complement already existing safety nets that Government has structured to mitigate effects of drought and COVID 19 which has wrecked the country since March 2020.
US$1 465 602 was paid to the Government of Zimbabwe while US$290 288 to UN World Food Programme (WFP) as a parametric drought risk insurance pay-out to support extensive drought in the country.
This disbursement comes as a result of the drought insurance policies bought by Zimbabwe and UNWFP to cover the 2019/20 rainfall season and is intended to contribute in funding the early response measures already in place.
Speaking after the official notification of the ARC pay-out the Minister of Finance and Economic Development, Professor Mthuli Ncube said, “This is evidence that the Government of Zimbabwe is taking measures of cushioning its fiscus against natural disasters, in the country.”
The country is increasingly becoming vulnerable to severe drought events such as floods and tropical cyclones due to climate change, as such Government has since moved to revamp its disaster financing systems.
Commending Government’s objectivity, UN Assistant Secretary-General and outgoing ARC Director-General, Mr Mohamed Beavogui, said; “Although we can never celebrate a disaster, it calls for a celebration when a Government is evidently taking steps of hedging its investments in food security against natural risk to broaden fiscus flexibility when a disaster strikes.’
He further assured Government that ARC together with other partners would play its role to support Zimbabwe’s journey towards having a more comprehensive Disaster Risk Financing framework.
Assenting, Mr Niels Balzer, the UNWFP Country Director and Representative for Zimbabwe said, “The ARC pay-out to the Government of Zimbabwe and WFP through the Replica initiative is proof that the concept works as an innovative instrument to humanitarian agencies to finance early response and lifesaving actions in the aftermath of extreme droughts.
“When combined with other instruments such as micro-insurance for smallholder farmers and Forecast-based Anticipatory Action, it provides powerful combined approach that has the potential to accelerate progress towards zero hunger in Zimbabwe.”
He likewise urged other Governments and Development Partners especially in the SADC region to capitalise on this instrument for enhancing climate resilience and food security in the region.
The pay-out will be used to support approximately 155 000 families in the highly vulnerable districts of Buhera, UMP, Chivi. Binga and Bulilima through unconditional cash disbursements.
WFP said that it would use their pay-out to support around 33,550 beneficiaries with unconditional food assistance in prioritised wards with urgent food security needs during Sept/Oct 2020 and complement Government’s Food Deficit Mitigation Strategy response efforts.
Government has also called upon Development Partners to complement its efforts to increase insurance coverage at sovereign level.
In the same spirit, Germany has confirmed an additional US$1 million funding for Zimbabwe to finance insurance premium for the 2020/21 season, under BMZ’s emergency funding for the COVID-19 response.