The Government of Ethiopia has declared its intent and initiated the signing of the African Risk Capacity (ARC) Treaty and a Memorandum of Understanding (MoU) with PULA Advisors and ARC Ltd. to help Ethiopian farmers better prepare, plan and respond to extreme weather events, pests and other risks.
The intent to sign the ARC Treaty was announced today by the Minister of Agriculture H.E. Ato Oumer Hussein. The signing of the MoU will set out the terms, conditions and a framework to facilitate cooperation between the Government of Ethiopia, ARC Ltd and PULA.
Ethiopia’s exposure to both drought, floods and locusts further threatens the national economy; requiring pre-emptive disaster risk reduction strategies to improve multi-hazard early warning, preparedness, and national coordination for disaster response. In this context, Ethiopian Agricultural Transformation Institute (ATI) in collaboration with Pula Advisors initiated an engagement with ARC in June 2022 to explore ways of insuring Ethiopian farmers.
In his opening remarks, the Minister of Agriculture said that ”Ethiopia’s hazard profile is dominated by various risks such as droughts, floods, desert locusts, and diseases that result in hunger and conflicts. We now need the Government to be involved in providing a relevant insurance solution to build our farmers’ resilience and profitability.
And we need to do this at scale. We need to build many partnerships to make this a sustainable reality for our farmers. In this regard, we are working with the African Union to sign the African Risk Capacity treaty and work with Pula Advisors to insure our farmers.”Ato Oumer concluded.
Commending the Government of Ethiopia for their intent to sign the ARC Treaty and MoU, ARC CEO Lesley Ndovu remarked: “Insurance is an ideal instrument to protect farmers and the GDP of Ethiopia and other African countries.”
Continuing, Mr Ndlovu added, “ARC has supported insuring over 30 million farmers since 2012. We would like to particularly convey our readiness to work with the Ethiopian smallholder farmers and Pula in accurately profiling their natural disaster risks and designing quantified response plans to better secure the lives and livelihoods of vulnerable populations.”
“Joining the ARC treaty comes at no cost and there are no financial obligations for the member countries and we look forward to Ethiopia becoming our 36th member state” Pula’s President Rose Goslinga also highlighted that ”This commitment by The Government of Ethiopia and ARC offers hope to millions of vulnerable farmers all across Ethiopia who
are fighting for their survival from climate crises.”
Dr. Mandefro Nigussie, ATI’s DG, said “ATI has been playing a critical role in supporting agricultural development with the MoA and GoE over the last 12 years. In the same spirit, we gathered here today to discuss our next big intervention – Agricultural insurance through the Input Voucher System (IVS). ATI, along with MoA, RBoAs and various financial institutions, has developed this effective distribution system over the last 8-9 years.
In 2022 alone, 7 million farmers were provided inputs through IVS.” H.E. Ato Oumer has instructed the ATI to play the leading role in working with various Ministries, financial institutions and farmers to develop and deliver this project by the Meher season.
The event was also attended by Advisor State Minister Ato Efa, State Minister Dr. Melese, and representatives from the Ministry of Finance, Ministry of Agriculture, Ministry of Foreign Affairs, National Bank of Ethiopia (NBE), Ethiopian Agricultural Authority (EAA), EIAR, National Meteorological Agency, private insurance companies among others.
ARC is led by 35 African Union Member States responsible for setting the direction of the organisation’s Disaster Risk Management research and policy, and have access ARC’s Disaster Risk Management tools services, including the Africa RiskView software, the ARC Capacity Building Programme, and ARC Ltd’s risk transfer services. There are ongoing efforts and ensure that more countries sign up to support this mechanism and endorse it as Africa’s solution to the growing threats of natural disasters.