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In Focus: Access to the African Risk Capacity Programme

Countries
Ghana
+ 1 more
Sources
GIZ
Publication date
Origin
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SUBJECT

Agricultural production in many parts of Africa is affected by natural climate variability and is likely to be significantly compromised by climate change through the higher incidence of drought, erratic rainfall and damaging high temperatures. The current system for responding to natural disasters is often not timely or equitable enough, with much of the cost being borne by farmers. When international assistance is available it is often too late.

The African Risk Capacity (ARC) is a continental sovereign risk pool and early response mechanism designed to execute pre‐approved contingency. ARC’s mission is to help African Union Member States to protect the food security of their vulnerable populations. As an insurance risk pool, ARC’s objective is to capitalize on the natural diversification of weather risk across Africa, allowing countries to manage their risk as a group in a financially efficient manner in order to respond to probable but uncertain risks.

In order to participate in ARC, countries must undertake several processes, including:

  1. Customizing the Africa RiskView software,
  2. Signing a Memorandum of Understanding (MoU) for in-country capacity building,
  3. Defining a contingency plan for ARC payouts, and 4. Determining risk transfer parameters.