African Risc Capacity has made a $3.3 million (K6 billion) insurance payout to Malawi Government in respect to the 2024/25 drought related agricultural losses.
The payout is lower than $11.2 million (about K19.6 billion) that the country received last year to cushion the impact of El Nino weather, but Minister of Finance and Economic Affairs Simplex Chithyola Banda said the funds will bridge the financing gap especially on resource mobilisation to help 5.7 million people at risk of hunger.
Speaking during a cheque presentation on Friday in Lilongwe, Africa Risk Capacity Insurance board chairperson Maxwell Mkwezalamba said the payout will be used to support individuals that are currently facing some food challenges because of the drought.
Said Mkwezalamba: “The amount is around $3 million [K5.3 billion], this is what we call traditional sovereign insurance cover, but then we also have an amount of $311 000 [K544 million] anticipatory insurance so, the total is around $3.37 million.”
Chithyola Banda said the payout has come at the right time when government needs to support over 5.7 million Malawians at risk of food shortage due to drought induced low yields, according to the Malawi Vulnerability Assessment Committee.
Minister of Agriculture Sam Kawale said the insurance policy was bought on behalf of the farmers to cushion in their farming endeavours considering that climate change impacts have resulted in frequent disasters and catastrophic conditions.
The premium for the traditional insurance policy was supported by the African Development Bank, while the German Government through KfW supported the premium for the anticipatory insurance policy.
