Nigeria Signs MoU with African Risk Capacity
The Government of the Federal Republic of Nigeria has in Busan, South Korea, on the sidelines of the ongoing AfDB Annual Meetings, signed a Memorandum of Understanding (MoU) with the African Risk Capacity (ARC) to serve as a framework to facilitate cooperation and collaboration between ARC Agency and Nigeria setting out the terms and conditions under which they will work together to address the impact of extreme weather events in Nigeria, including training support to Government personnel.
This is coming just a day after the AfDB President Akinwumi Adesina, pledged the full support of the bank for the work of African Risk Capacity; and also called on more stakeholders to join the ARC to make sure that the financing mechanism for Africa’s climate risks are available to enable countries to insure themselves against natural disaster risks.
The Bank and ARC has a partnership since March 2017 to strengthen their technical collaboration towards enhancing the risk management infrastructure and policy across Africa while supporting countries in building resilience against climate shocks.
Speaking on the signing of the MoU, Nigeria’s Honourable Minister for Finance, Mrs. Kemi Adeosun, congratulated the African Risk Capacity for the innovative approach it is taking towards climate risk financing and management in Africa; and expressed her satisfaction that Nigeria can now formally work together with the ARC to address the impacts of extreme weather events in the country through leveraging on all the available technical tools.
The journey towards a mutual technical collaboration with Nigeria began in July 2015 when the ARC team undertook a scoping mission which established the need for more efficient response to natural disasters which often disproportionately affect small holder farmers and other vulnerable populations.
The Government of Nigeria was a founding member of ARC, participating in the ARC establishment discussions and the nomination of Dr. Ngozi Okonjo-Iweala as the Chair of the ARC Agency Governing Board by the then African Union Commission Chairperson, H.E. Dr. Nkosazana Dlamini-Zuma. Nigeria subsequently signed the ARC Establishment Agreement on the 4th of December 2014 thereby formally became a member of the institution.
ARC was established as a Specialized Agency of the African Union (AU) to help member states improve their capacities to better plan, prepare and respond to extreme weather events and natural disasters. Through its first financial affiliate, ARC Ltd, the institution provides African governments with innovative risk management and risk transfer tools and services towards creating a comprehensive pan-African disaster response system.
Mr. Mohamed Beavogui, the Director-General of ARC expressed his appreciation to the Nigerian Government for the signing of the MoU noting that, “the leadership role of Nigeria in the continent and in the establishment of the ARC makes the signing of a formal MoU quite momentous for our work in the region. We want to create systems that can truly protect the livelihoods of the most vulnerable and safeguard the significant development gains made by the country over the years.”
Earlier in the week, the Federal Government of Nigeria has, through the Finance Minister Adeosun, announced the renewal of its agreement with the African Development Bank (AfDB) on the Nigeria Trust Fund (NTF) for additional 10 years to assist the development efforts of low-income regional member countries.
Under the collaborative framework of the Memorandum of Understanding, the African Risk Capacity shall work with the Government of Nigeria to strengthen existing national disaster risk management systems and a deepening of risk transfer solutions in the country.
ARC consists of ARC Agency and ARC Insurance Company Limited (ARC Ltd). ARC Agency was established in 2012 as a Specialised Agency of the African Union to help Member States improve their capacities to better plan, prepare and respond to weather-related disasters. ARC Ltd is a mutual insurance facility providing risk transfer services to Member States through risk pooling and access to reinsurance markets; it is owned by Member States with active insurance policies as well as KfW Development Bank and the UK Department of International Development (DfiD), as capital contributors.
With the support of the United Kingdom, Germany, Sweden, Switzerland, Canada, France, and the United States, ARC assists AU Member States in reducing the risk of loss and damage caused by extreme weather events affecting Africa’s populations by providing, through sovereign disaster risk insurance, targeted responses to natural disasters in a more timely, cost-effective, objective and transparent manner. ARC is now using its expertise to help tackle some of the other greatest threats faced by the continent, including outbreaks and epidemics.