Climate change adaptation costs have been projected at about $50 billion annually by 2050, a situation that warrants urgent solutions among African countries.
This was one of the key issues discussed at a Climate and Disaster Risk Financing and Insurance (CDRFI) high-level forum the African Development Bank (AfDB) Group organised in collaboration with the Malawi Government from Tuesday to Thursday in Blantyre.
Delegates from 24 AfDB member countries said with such a projection, disaster risk insurance will play a critical role in advancing Africa’s climate adaptation agenda, especially in cushioning affected countries and households.
In his presentation titled ‘Linking Disaster Risk Financing with Social Protection Systems’, National Local Government Finance Committee disaster risk finance specialist and scalability coordinator Mulder Mkutumula observed that scaling up investments in climate change adaptation measures remains integral.
He said: “Pre-established rules and financing help to speed up response, but significant investments are needed to build delivery systems.”
Mkutumula, however, said African governments should be helped with building emergency systems to respond to disasters fuelled by climate-related challenges.
He noted that catastrophe insurance would provide debt-free resources.
The specialist observed that for climate-related measures and cushioning mechanisms to work, there is need for understanding the link between livelihoods, food security and drought shocks.
In her contribution, United Nations Development Programme regional leader for Africa-Insurance and Risk Finance Facility Linet Odera said there are plenty of opportunities in creating a robust and enabling environment for disaster risk financing in Africa.
She said with the right strategies in place, insurance regulators can drive innovation, streamline policy frameworks and foster a conducive environment for scaling climate risk insurance products across Africa.
AfDB Group has the African Disaster Risk Financing Programme established in 2018 which has so far supported regional member countries with $100 million to enhance adaptation and strengthen resilience.
The funds have provided insurance coverage for over five million people against risks of severe drought and cyclones.
In its concept note pertaining to the three-day high-level forum, the AfDB notes that the climate and disaster risk financing landscape in Africa is rapidly evolving, with new players, products and approaches emerging.
Part of the concept note reads: “This evolution presents both opportunities to be seized by African countries and communities to better manage climate risks.”
The forum was held under the theme: ‘Harnessing Opportunities of the Evolving Climate Disaster Risk Financing and Insurance Landscape in Africa.’
