Bennett Oghifo
The Africa Risk Capacity (ARC) and the
United Nations Convention to Combat Desertification (UNCCD) have said
they will collaborate to support the development of financial tools to
help Africa to adapt and become resilient to future drought and other
extreme weather events.
Droughts have decimated communities and
livelihoods in Africa for long, according to a statement by UNCCD. “This
year alone, over 45 million people across Africa, mostly in Eastern and
Southern Africa, are food insecure due to prolonged droughts.”
The partnership will support African countries in managing the impact of
extreme weather events, including drought. It will also seek to
leverage private sector resources through the development of new
financial instruments that can provide insurance protection and other
funding to mitigate these risks.
The announcement was marked by the signing of a Memorandum of
Understanding by Ibrahim Thiaw, UNCCD Executive Secretary, and Mohamed
Beavogui, ARC Director General, during a two-day technical workshop
convened on 22 and 23 October in Bonn, Germany.
The workshop is reviewing the proposed principles and work of the
eXtreme Climate Facility (XCF). XCF is a new financial vehicle aiming to
tap into capital market resources to provide financial support to
countries affected by extreme weather events.
Technical experts gathered at the workshop are exploring the robustness
of the core elements of the XCF. These include the financial products
and their underlying index, viable alternative market-based solutions
and the partnerships that are essential to deliver both the product and
the aims.
The process for the XCF began in March 2014 when the African Union
Conference of Ministers of Finance requested the ARC, by decision no.
927(XLVII), at the Seventh AU-ECA Joint Annual Meetings in Abuja,
Nigeria, to develop a financing mechanism to enhance Member States’
response to the impacts of increasing climate volatility.
The first Special Report on Climate Change and Land released just three
months ago by the authoritative Intergovernmental Panel on Climate
Change warns that droughts may increase in frequency and intensity in
much of Africa.
“The message is clear. We will see an increasing number of droughts with
unprecedented severity, which are exacerbated by climate change. No
country or region, rich or poor, is immune to the vagaries of drought.
The ARC-led XCF will become an important tool to help African countries
to cope effectively with the impacts of drought,” said Ibrahim Thiaw
during the ceremony.
“Currently, through the Drought Initiative, the UNCCD is helping 35 of
Africa’s 57 countries to create the mechanisms they need to take early
action to avert drought disasters. Today, Africa is ramping up
pre-emptive actions as a unified front against future drought and
climate-induced disasters in the region,” Thiaw added.
“Reducing the impacts of drought and other natural disasters by helping
Member States’ improve climate resilience through innovative mitigation
and risk financing instruments are key to our mandate,” said ASG
Beavogui.
“The Agreement signed today with UNCCD will create a functional synergy
in our efforts to help countries better understand their risk profiles,
improve knowledge and strengthen capacities for climate adaptation and
food security,” Beavogui concluded.
As designed currently, the XCF has a three-point agenda; to connect to
private sector financing, to encourage best practice in public policy
and to integrate climate science into its functions.
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