Drought is now a recurrent occasion in Zimbabwe, risking the agricultural sector and causing food insecurity to the primary industry-based nation.
Such a recurrence has led to over 60% of the Zimbabwean population being considered food insecure by nthe United Nation.
At such a time the Zimbabwean Cabinet approved the signing of the Insurance Policy Agreement between Africa Risk Capacity Limited (ARC Ltd) and the Government of Zimbabwe, as well as the Memorandum of Understanding between the Government of Zimbabwe, the World Food Programme and ARC Limited.
The cabinet noted that the country will benefit in terms of ARC coverage of drought by preparing and putting in place necessary measures towards drought mitigation and early response to save the vulnerable populace according to Information Minister Monica Mutsvangwa.
“Cabinet was informed that Government, through Treasury would purchase a drought insurance premium of US$1 003 571, which will unlock a maximum coverage of US$5 345 668.00,” Mutsangwa said.
“Furthermore, the World Food Programme (WFP) will pay a premium amount of US$200 000 which will unlock a maximum coverage of US$1 065 329.00 for this coming 2019/20 season.”
The African Risk Capacity Agency seeks to provide the participating Member States of the African Union with access to financial resources to help them to respond to Extreme Weather Events.
The Agency has caused for the establishment of an affiliated financial entity, the African Risk Capacity Insurance Company Limited to provide insurance coverage, risk pooling and transfer services to ARC Member States.