Representatives from the African Risk Capacity (ARC) Group and the African Development Bank have delivered a $11.2 million insurance payout to the government of Malawi, aimed at aiding the country’s recovery from a severe drought triggered by the El Niño weather phenomenon.
The cheque presentation took place during a ceremony on August 2 in Lilongwe, the capital of Malawi, and was overseen by President Dr. Lazarus McCarthy Chakwera.
This insurance payment, which follows the government’s drought insurance policy, was funded by the African Development Bank through its African Development Fund and the Africa Disaster Risk Financing (ADRiFi) Programme Multi-Donor Trust Fund. The ADRiFi Trust Fund is a collaborative initiative between the Bank and the ARC Group, an African Union agency dedicated to enhancing African nations’ ability to plan, prepare for, and respond to extreme weather events and natural disasters.
The funds will be used to provide food assistance to approximately 235,000 households in Malawi’s Lower Shire and Southern regions, as well as cash transfers to 118,000 households in the Central region.
Accepting the cheque, President Chakwera remarked, “This insurance payout is more than just a financial transaction; it is a lifeline for our vulnerable populations. It represents the power of foresight and planning, allowing us to respond swiftly and effectively to the needs of our people. This payout ensures that no Malawian will suffer the worst effects of hunger due to the recent drought.”
El Niño, characterized by the abnormal warming of the eastern Pacific Ocean, leads to dry conditions in Southern Africa and wetter conditions in Eastern Africa. The 2024 El Niño has caused one of the worst droughts in Southern Africa in recent years.
The World Meteorological Organization has identified the 2024 El Niño as one of the five strongest on record, with Southern Africa experiencing high temperatures and below-average rainfall from November 2023 to April 2024. These conditions have severely impacted Malawi, particularly in the Lower Shire and Southern regions, exacerbating an already dire food shortage due to ongoing drought.
In response, the Malawian government declared a state of disaster in the hardest-hit areas in March 2024 and launched a National El Niño Response Appeal in April to mobilize resources for humanitarian aid and boost food production.
“The devastating El Niño-driven drought in Southern Africa highlights the urgent need for preparedness in the face of increasing weather-related disasters,” said Ibrahima Cheikh Diong, UN Assistant Secretary General and ARC Group Director General. “The ARC mechanism has proven its value in facilitating timely interventions, and we are grateful to partners like the African Development Bank for enabling African governments to participate in ARC risk pools. With your financial support, we can expand our reach and make a difference in the lives of those most vulnerable.”
Dr. Yero Baldeh, Director of the Transition States Coordination Office at the African Development Bank, emphasized the link between climate change and fragility, noting that the Bank, through the Transition Support Facility (TSF), will continue to support Malawi in strengthening its capacity to prevent, prepare for, and withstand climatic shocks.
The African Development Bank, through the ADRiFi Programme, has contributed to drought insurance policy payments for several governments across Southern Africa, including Madagascar, Malawi, Mozambique, Zambia, and Zimbabwe. The Bank has also supported disaster risk insurance premiums for tropical cyclones in Madagascar.
By September 2024, the ARC Group is expected to have disbursed a total of $62 million in disaster risk insurance payouts to El Niño-affected countries in Southern Africa, including $11.6 million to Malawi, $5.5 million to Mozambique, $13.3 million to Zambia, and $31.8 million to Zimbabwe.
