African Risk Capacity Conducts High Level Policy Dialogue on Innovative Financial Instruments for Natural Disaster Risk and Health Outbreaks Management at TICAD7 Summit, Yokohama, Japan

African leaders who gathered in Yokohama this year to discuss Japanese-African collaboration had a common rallying point: “Advancing Africa’s development through People, Technology and Innovation”. The seventh meeting of the Tokyo International Conference on African Development (TICAD 7) took place from 28-30 August with over forty-two Heads of African States in participation. Since its first edition in 1993, TICAD has evolved as a major global multilateral forum seeking to mobilize international support for Africa’s development. The seventh edition was co-hosted by the United Nations (UN), United Nations Development Programme (UNDP), World Bank (WB) and the African Union Commission (AUC).

Jointly with the African Union Commission, the African Risk Capacity (ARC) convened a High-Level Policy dialogue on ‘Innovative Financial Instruments for Natural Disaster Risk and Health Outbreaks Management’. The dialogue sought to explore potential strategic investments and policy incentives necessary to fast-track risk financing solutions to respond to ever increasing extreme weather events and natural disasters, including health outbreaks and epidemics.

ARC leveraged on the Summit to glean from Japanese experience in managing natural and health disaster risks in a bid to fostering South-South and Triangular cooperation. Facilitated by Mr. Birama Sidibe, Former vice President of the Islamic Development Bank, the dialogue brought into discussions Prof. Muhammad Ali Pate, Global Director at the World Bank and Director, Global Financing Facility for Women, Children and Adolescents; H.E. Josefa Leonel Correa Sacko, Commissioner of Agriculture and Rural Economy, African Union Commission; Dr. Jennifer Blanke, African Development Bank Vice-president for Agriculture, Human and Social Development; Ms. Megumi Muto, Director General, Global Environment Department at the Japanese International Cooperation Agency (JICA); Professor Tadanori Inomata, Former Ambassador of Japan to Costa Rica and Nagasaki University’s Advisor for Global Relations; Mr. Torsten Reinecke, Africa Vice President, SYSMEX Corporation; Mr Takashi Hongo, Senior Fellow, Mitsui Global Strategic Studies Institute and Ms Sheila de Lemos Santana Afonso, Permanent Secretary in the Ministry of Land, Environment and Rural Development of Mozambique. Mr. Mohamed Beavogui, UN Assistant Secretary General and ARC’s Director General provided a key note address.

The session was organised in line with pillar 2 of the Yokohama Declaration of ‘Deepening Sustainable and Resilient Societies’, a joint Japan-African plan which would frame Japanese and African collaboration in the next 2 years.

An African Solution for African problems

African Union Commissioner for Rural Economy and Agriculture, Her Excellency Josefa Sacko, set the tone of the session by sharing the reasons for which ARC was created. “When the AU Heads of State and government established the African Risk Capacity in 2012”, she said, “the rationale was to establish an institution that would create mechanisms to enable countries access timely and predictable contingent financing at the onset of disasters.” Such an innovation exists in only a few other regions in the world including the Pacific and the Caribbean.

UN Assistant Secretary-General and ARC’s Director General, Mohamed Beavogui, provided the challenges and successes of ARC since its creation. “The bulk of the work lies in the extensive capacity building programme which we take the countries through, from modelling their climate data to providing training in contingency planning and developing risk transfer parameters, amounting to 11 countries receiving Certificates of Good Standing, a set pre-requisite for taking out insurance and receiving pay-outs,” he said. “Looking back, despite these challenges, we have managed to provide a cumulative insurance coverage of over 500 million to over 50 million people, he added.

A common thread of cooperation

In validation of the theme of the session, the discussants agreed on the importance of collaboration and cooperation towards achieving the Yokohama Declaration pillar of “Deepening Sustainable and Resilient Societies’’. The World Bank Global Director discussed its suite of Health Epidemic and natural Disaster Risk Financing tools, indicating the importance of collaborating with these tools. “Universal Global Health Coverage is available and needs to be leveraged upon” said Prof. Muhammad Ali Pate. He further indicated that pandemic risks are bound to increase due to increased urbanization, and that ARC and the World Bank have the opportunity to complement each other’s’ efforts on preparedness, data collection and lessons learned thus far.

JICA shared Japan’s strengths in managing natural disasters, indicating that it combines ex-ante and ex-post methods with a strong focus on ‘building-back-better’ reconstruction and recovery methods to ensure the country’s resilience to disasters. These experiences were highlighted by its Director General for Global Environment, Ms Megumi Muto.

Mr Takashi Hongo, Senior Fellow of the Mitsui Global Strategic Studies Institute elaborated on collaboration opportunities with Japan by showcasing the use of Japanese science tools. Under Thailand’s Weather Index Base Insurance for Agriculture, compensation is provided to farmers when harvest drops result from low precipitation. A deep “screening phase,” is first conducted, and entails deep analyses of climate risk and possible impacts.

Adding further weight to Japanese insights was Professor Tadanori Inomata, Advisor, Nagasaki University Office for Global Relations who reinforced the significance of ARC’s role as an Innovative Fund. The key to being more effective, he said, is the collection of disaggregated data and information and the production of hazard maps to inform insurance policies.

ARC financial partner, the African Development Bank (AfDB), used the platform to showcase ongoing collaboration with ARC to support countries’ ability to pay premiums. The AfDB’s Board of Directors approved the African Disaster Risk Financing Initiative (ADRiFi) in October 2018, explained Dr Jennifer Blanke, “which lays the foundation for Bank’s support to Regional Member Countries in promoting disaster risk financing and moving from crisis response to risk management, ultimately protecting lives and livelihoods, which reduces reliance on humanitarian assistance”. As a future outlook, the Bank will tie its climate smart Development Finance support with coordinated disaster risk insurance across the continent.


The reality on ground

The discussants acknowledged the challenges of implementing all the recommendations. Feedback from Member States representatives highlighted the extent of work that needs to be done to financially pre-empt disaster risks on the continent.

Mozambique’s Permanent Secretary at the Ministry of Land, Environment and Rural Development, Ms Sheila de Lemos Santana Afonso, drove home these realities by enumerating the needs which her country still faces. With a year hit by various cyclones including Idai, the country signed an MoU with ARC in May 2019. “We need support to enhance regional cooperation on Early Warning”, Ms Afonso said. “There is need to translate climate change or natural disasters into the local languages”. Although the country established a Disaster Management Fund in 2016, these needs continue to exist and hamper the ability of the Fund to function effectively.


Written by African Risk Capacity (ARC)