Oxford Policy Management evaluated the African Risk Capacity (ARC), which provides sovereign and other insurance and builds capacity in member countries to respond to climate disasters. The evaluation, financed by the UK’s Foreign, Commonwealth and Development Office, and the Agence Française de Développement, looked at ARC’s work to grow insurance risk pools and strengthen country capacity to respond, as well as its longer-term sustainability. A detailed value for money analysis was also undertaken.
It found that ARC has strengthened capacity to respond to drought through contingency planning and insurance in 17 out of 35 member states. Its support is widely valued by recipients. However, the distribution of support to beneficiary households by governments that received a payout often did not happen within the mandated time period, undermining its main objective. The capacity built often does not appear to be sustainable beyond ARC’s support.
The value for money assessment rated economy and efficiency as adequate and adequate-to-good, respectively. It was rated less well on effectiveness and equity, due to the problems in reaching beneficiaries on time and challenges in government targeting processes. ARC’s drought insurance risk pool has grown considerably in recent years – due in a large part to subsidies on insurance premiums and a programme of parallel insurance for NGO networks. However, ARC is facing a significant financing and organisational challenges.
A set of recommendations are made to address the evaluation findings.