Emmanuel is currently in Morocco as part of the live-reporting team of the UN Economic Commission for Africa/African Union Commission/African Development Bank-sponsored Fourth Climate Change and Development in Africa (CCDA), which is underway till 10 October ; and where he will also file stories for the African Development Forum from 12-16th October.
The African Union as a ‘Game-changer’ in combating climate Change
By Emmanuel.K.Bensah Jr Marakkech, Morocco
At a time when the African Union has come under considerable criticism for doing little to address pertinent development issues on the continent, along comes the African Risk Capacity to help combat climate change. If Tosi Mpanu-Mpanu, Board Member of the ARC Agency Governing Board, is to be believed, the ARC is a real “game-changer” in helping address climate change in Africa.
|Mr.Tosi Mpanu-Mpanu, Board Member, |
ARC Agency Governing Board
Established in 2012, the ARC is a specialized agency of the AU, established by a Conference of Plenipotentiaries, to help AU Member States improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters.
According to Mpanu-Mpanu, it functions as an insurance scheme that helps African countries pool resources together. He believes a system like this “makes perfect economic sense as countries deal with drought”. It further helps countries insure themselves against risk.
Once a request for assistance is approved by the Board, it takes around one hundred days for the money to be disbursed. This contrasts sharply with the donor agencies, which often take between four and six months. Against this backdrop is the idea that action must be taken quickly.
Pressed on why the idea of the insurance sector helping address Africa’s problems at a time one barely hears of that sector, Mpanu-Mpanu explained that one of the reasons why the ARC is a game-changer is because it is about “changing the narrative” of African countries. It is also about understanding the risk-profile associated with climate change in the sense that when disaster strikes, a country will be well-covered.
According to their website, the ARC comprises two entities: the Specialized Agency and a financial affiliate, ARC Insurance Company Limited (the Company). The Agency provides general oversight and supervising development of ARC capacity and services. The Company is the financial affiliate that carries out commercial insurance functions of risk pooling and risk transfer in accordance with national regulations for parametric weather insurance in Bermuda, the Caribbean, where it is located until such time that an equally favourable legal and regulatory regime exists in an AU Member State.
Mpanu-Mpanu explained that had Mauritania known of ARC when it experienced its severe drought last year, it would not have spent an excess of around one million dollars to address it. He further elaborated on the dynamics of the mechanism by explaining that, given that disaster cannot hit countries all at once, when countries pay a premium, the pot will get larger than the-over $100m that donors have helped capitalize as the ARC was established.
The ARC is supported by DFID; SIDA; KFW(German Development Bank) and Rockefeller Foundation, among others.
Mpanu-Mpanu looks forward to the day when all fifty-four member countries will be covered by the ARC.