African Development Bank approves the Africa Disaster Risks Financing Programme
The African Development Bank has approved the Africa Disaster Risks Financing (ADRiFi) Program, the institution's first climate risk management program to boost resilience and response to climate shocks in regional member countries.
The comprehensive program, open to regional member countries, would like to assess their climate and to improve their climate-related risks and costs, to respond to disasters at both national and sub-national levels. It will also facilitate initial financing for countries in need of support. The program's initial phase is expected to run from 2019 to 2023.
The improved resilience and adaptation of the climate change, as well as disaster risk insurance cover, will reduce the vulnerability of the environment and prevent loss of livelihoods in communities, especially for smallholder farmers. Nine countries have an interest in participating in the program- Burkina Faso, Chad, Gambia, Madagascar, Malawi, Mali, Mauritania, Niger and Senegal.
"Africa is the most vulnerable continent to climate change, prone to a wide variety of natural disasters including droughts, floods and tropical cyclones. However, disaster risk management suffers from inadequate financing and challenges in the deployment of available funds, "said Atsuko Toda, Bank Director for Agricultural Finance and Rural Development.
"This program is a significant step towards reducing the exposure and vulnerability of African countries, and will create and repair these countries from climate shocks," Toda said.
ADRiFi will promote disaster response mechanisms such as sovereign parametric index-based insurance, for which payouts will be disbursed automatically and in timely manner when a pre-defined risk threshold is exceeded. It is estimated that every US $ 1 spent on ex-ante intervention through the program will save US $ 4.40 in ex-post disaster relief measures for six months after the event.
The ADRiFi program is directly aligned with the Bank's 'High 5' priorities, particularly 'Feed Africa' and 'Improving the Quality of Life of Africans'. It is also aligned with the Bank's Climate Change Action Plan II (2016-2020) policy.
The Bank has signed a memorandum of understanding with the African Risk. As a key partner, ARC will assist member countries with policies on risk groups and other sovereign disaster risk measures.