The Insurance and Pensions Commission (IPEC) and the International Finance Corporation (IFC) have launched the agricultural index-based insurance project whose objective is to provide insurance solutions for smallholder farmers who are vulnerable to climate-related crop losses in Zimbabwe.
This follows the signing of a partnership agreement between IPEC and IFC in February this year under the banner “Agriculture Insurance Support Project”.
The project was launched virtually and was attended by various stakeholders, including government ministries, insurers, Meteorological Services Department, developmental organisations, representatives from the agricultural value chain.
In her welcoming remarks, IPEC Commissioner, Dr Grace Muradzikwa said while the agricultural sector faced uncertainty owing to climate change, the uptake of agricultural insurance was relatively low.
Some of the factors behind this are unaffordability of existing agricultural insurance products, inappropriate products, low levels of awareness on the role of insurance by farmers, especially smallholder farmers and lack of trust between insurers and farmers.
“Notwithstanding these factors, the reality is that climate change can no longer be ignored,” she said.
“It has already demonstrated how devastating it can be, including on the agricultural sector. Agriculture index insurance provides protection to vulnerable households against specific weather shocks such as drought, flooding and hail among others.
“It is against this background that IPEC has partnered with IFC in this agriculture index insurance project to come up with a solution for smallholder farmers.”
In his remarks, IFC Country Manager for Southern Africa, Mr Adamou Labara said the project will allow for the development of a “solid foundation” for agriculture insurance in Zimbabwe
“We believe that a strong and inclusive insurance market will strengthen the resilience of farmers at all scales of production and will ultimately improve farmers’ access to other products and services such as quality inputs and financing,” said Mr Labara.
“Supporting the agribusiness sector and financial inclusion are important elements of IFC’s strategy for Zimbabwe.”
IFC Principal Operations Officer and Insurance Practice Group Supervisor for Africa, Mr Gilles Galludec, said given the critical role that agriculture plays in Zimbabwe’s economy, it is important to find solutions to mitigate risks linked to climate change.
“We will try to bring the global experience we have and in particular the expertise we have in a number of countries in Africa on the same topic and the same kind of issues,” he said.
“Here, we will provide you with the tools and information required to design a suitable regulatory framework for Zimbabwe.”
The project is expected to be completed in June next year.
Sharon Onyango – IFC Associate Operations Officer and Insurance Specialist and Shadreck Mapfumo – IFC Senior Operations Officer and Insurance Practice Group Lead for Africa presented on the agricultural index insurance project.
The presentation can be accessed here