Joint AUC /ARC PRESS RELEASE

African Risk Capacity & African Union Open Workshop on Transforming Disaster Risk Financing towards Agenda 2063

Addis Ababa , 26th November 2018 -The African Risk Capacity (ARC) and the African Union Department for Rural Economy and Agriculture (DREA) this morning opened a 2-day workshop under the theme, ‘Transforming Disaster Risk Financing towards Agenda 2063’ at the African Union Headquarters in Addis Ababa,Ethiopia.

The workshop is aimed at providing a platform to present the work of African Risk Capacity (ARC) and adequately clarify its role in disaster risk financing and management on the continent; as well as share clear linkages between Disaster Risk Financing and the Programme of Action for the African Strategy for DRR and the SENDAI framework.

Welcoming the participants to the workshop, the Director-General of the African Risk Capacity, Mr. Mohamed Beavogui commended the timing of the workshop, and shared his experience in leading the institution. He indicated that the task of working with member countries both in identifying and providing customised solutions for disaster risks has been rewarding, but not without challenges. “As a pan-African institution, the ARC team have been relentless in creating advocacy around our mandate by engaging with our Member States to jointly explore efficient means of surmounting some of the key constraints preventing them from fully embracing our customised disaster risk management solutions. We have come this far owing to the invaluable support from the DREA, our donors, the AfDB, and other partners”, Mr. Beavogui said.

The ARC DG informed the participants that till date, ARC has provided capacity building, technical and institutional support in disaster risk management and financing to more than 16 African countries out the 34 that have signed the ARC treaty. ARC and its insurance affiliate (ARC Ltd) have underwritten over $400 million of policies droughts insurance and provided indirectly insurance coverage to more than 9.7 million of Africans. So far, the sovereign pool insurance has disbursed cumulatively $36.8 million in payout to drought-affected countries in Africa. These funds were used to finance rapid response and provide assistance to over 2.1 million vulnerable people and over 1 million livestock.

Only recently, he continued, the African Development Bank, under its partnership with ARC, approved the implementation of the Africa Disaster Risk Financing (ADRiFi) programme which will support countries to develop climate risk profiles, strengthen contingency plans and support risk transfer through premium subsidies of up to 50% over a five-year period.

In her opening remarks, the Chair of the Permanent Representatives’ Committee (PRC) who is also the Ambassador Extraordinary and Plenipotentiary of the Republic of Rwanda to Ethiopia and Djibouti, and Permanent Representative to African Union and United Nations Economic Commission for Africa, H.E. Hope Tumukunde Gasatura, thanked the African Risk Capacity for organising the workshop. She indicated that the focus on transforming the way Africa responds to disaster risk is timely and resonates to the theme of the just concluded African Union Extraordinary Session on AU Reforms which aims to ‘make Africa stronger and give our people the future they deserve’. “The countries that have signed the ARC framework agreement, including the Government of Rwanda, deserve our commendation; but the rest of Africa need to also sign the MoU as soon as possible. If the ARC Agreement remain unsigned or unratified, the objective of establishing ARC will be greatly undermined and frustrated, and we don’t want that….”,she said.

Despite its successes, ARC acknowledges that risk financing through risk transfer is not sufficient for effective disaster risk management and so recognizes the importance of other solutions towards building of countries’ resilience and risk reduction infrastructure. Although there is a growing interest in ARC insurance products and services, Members States still face challenges and constraints in mobilizing premiums and ensuring consistent participation the insurance pool. Also, lack of adequate insurance knowledge and culture within the region undermine the efforts to get African countries to embrace risk financing products and services which are necessary for sustainable economic growth. Hence, the need for a discussion to better understand the work of ARC.

Formally opening the workshop, The African Union Commissioner for the Department of Rural Economy and Agriculture, H.E. Sacko Josefa Leonel Correa, represented by the Director, DREA, Dr. Godfrey Bahiigwa, commended the wisdom of the African Union Heads of States & Governments in creating the African Risk Capacity. “In a little over 5 years, ARC has proven to be the missing chip in our efforts to meaningfully respond to the growing natural disasters in the continent. Its innovative approach and good performance amidst challenges have justified the good judgement of our leaders; and further resonates with the AU Agenda 2063 Aspirations to create an Africa that is “strong, united, resilient and influential global player and partner” based on the ideals of Pan Africanism and the vision of Africa’s Renaissance”, he said.

The African Risk Capacity (ARC) was established by the African Union (AU) in November 2012 as a Specialised Agency under the Department for Rural Economy and Agriculture (AU-DREA) to respond to the impacts of extreme weather events and natural disasters and serve as a continental disaster risk financing mechanism.

Ms. Barbara Schafer, the Counsellor and Head of Development Cooperation with the AU German Embassy, which Government is one of the donors to ARC, disclosed that Germany has been very committed to the success of ARC from the beginning and is working closely with other donors to ensure that the problem of premium financing constraining African countries from participating in the mechanism.

The outcome of the 2-day workshop will help strengthen the conversation between the African Risk Capacity and its member countries, stakeholders and potential beneficiaries in a manner that will improve understanding of the role of disaster risk financing and the contribution of regional risk pools to addressing weather-based disaster risks. It will also boost a specific understanding of ARC’s operations and identification of gaps for strengthening delivery of its products and services to AU Member States; including specific recommendations on how the AU support for advocacy of the mechanism would be strengthened.

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About African Risk Capacity (ARC): About African Risk Capacity (ARC) ARC consists of ARC Agency and ARC Insurance Company Limited (ARC Ltd). ARC Agency was established in 2012 as a Specialized Agency of the African Union to help Member States improve their capacities to better plan, prepare and respond to weather-related disasters. ARC Ltd. is a mutual insurance facility providing risk transfer services to Member States through risk pooling and access to reinsurance markets; it is owned by Member States with active insurance policies as well as KfW Development Bank and the UK Department of International Development as capital contributors.

With the support of the United Kingdom, Germany, Sweden, Switzerland, Canada, France, The Rockefeller Foundation and the United States, ARC assists AU Member States in reducing the risk of loss and damage caused by extreme weather events affecting Africa’s populations by providing, through sovereign disaster risk insurance, targeted responses to natural disasters in a more timely, cost-effective, objective and transparent manner. ARC is now using its expertise to help tackle some of the other greatest threats faced by the continent, including outbreaks and epidemics. www.africanriskcapacity.org

Media Enquiries:
Mr. Chinedu Moghalu/Chinedu.moghalu@wfp.org; Chinedu.moghalu@africanriskcapacity.org
Ms. Afrah Thabit / African union Commission/ Thabitma@africa-union.org / Cell: 0911200922

For further information:
http://www.africanriskcapacity.org/
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