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Madagascar secures millions from drought insurance payout

And sees ‘swift’ response to communities affected by climate change.
Image: AdobeStock

The Republic of Madagascar has received its third insurance payout of $797 049 (over R13.6 million*) from the African Risk Capacity (ARC) Group and the African Development Bank, following drought conditions which affected the country during 2021/22.

Madagascar took out drought insurance through the African Development Bank’s Africa disaster risk financing (ADRiFi) programme, which financed half of the 2021/2022 premium. ADRiFi is providing financial support for the insurance premium for five years, until 2023.

ARC says the payout will be used to “strengthen the resilience of part” of the approximately 1 024 523 people affected by the drought, as estimated by its Africa RiskView software.

“Madagascar is, unfortunately, one of the African countries hardest hit by the impact of climate change. However, the government’s foresight to take out drought insurance meant that we were able to work together to develop a pre-emptive contingency plan, detailing how the pay-out would be used. The swift release of funds means the most-affected communities can now be assisted as a matter of urgency,” adds Lesley Ndlovu, CEO of ARC Limited.

United Nations assistant secretary-general, and director general of the ARC Group, Ibrahima Diong, says the pay-out reaffirms the government’s commitment to protect its people against climate-induced shocks.

ARC and African Development Bank signed a Memorandum of Understanding (MoU) in March 2017 in a bid to support African countries with managing disaster risks through preparation and subsequent responses to climate-related issues.

“The  total of more than $13.5 million to boost the government’s ability to provide services that are keeping thousands of vulnerable people from food insecurity or migrating in search of food and work, demonstrates the bank’s sustained commitment to building African nations’ resilience to climate change,” says African Development Bank vice president for agriculture, human and social development Beth Dunford. 

*US$1 = R17.08

Nondumiso Lehutso is a Moneyweb intern.

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