AfDB Provides $1bn to Insure 40 million Farmers in Nigeria, Others
By Adedapo Adesanya
The African Development Bank Group (AfDB) has revealed that a $1 billion facility would be used to provide insurance to more than 40 million farmers across the continent against severe impacts of climate change.
Initially unveiled at the Africa Climate Summit held in Nairobi in September, the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) brings together governments, development agencies, the insurance sector and the private sector, said the president of the bank, Mr Akinwumi Adesina, while speaking during a side event at COP28 in Dubai.
He said ACRIFA aims to mobilise $1 billion of concessionary financing, high-risk capital and grants to support the African insurance industry.
The facility is designed to protect farmers and countries against catastrophic weather-related events and to stimulate private-sector investment in agriculture by mitigating risks.
“We have to support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events like drought, floods and pest infestation… We need to ensure that farmers and actors along the agricultural value chain are covered by insurance at scale,” he said.
Mr Adesina said over 97 per cent of farmers in Africa do not have agricultural insurance, adding that “Their only insurance is to pray… when they plant that it will rain. Pray when they harvest that there will not be rains or pest devastation and pray when they market their crops that prices will not collapse.”
“The eyes of more than 40 million smallholder farmers in Africa are on us. Let us make ACRIFA the answer to their prayers,” the Bank President said.
Mr Adesina said ACRIFA “will systematically support the African insurance industry to unlock financing for investments in climate-smart and green technologies.”
“It will strengthen local insurers and foster integration with national and international reinsurers,” he added.
He noted that the successful rollout of the facility will depend largely on partnerships such as the World Food Programme to deliver services to clients.
“The climate crisis is affecting agricultural communities across Africa. This programme will play an important role in protecting smallholder [farmers], pastoralists and small businesses from climate shocks,” said Ms Cindy McCain, Executive Director of the World Food Programme.
“We are excited about our growing partnership with the African Development Bank, which is allowing us to offer more support to governments, as they respond to the climate crisis,” she added.