ZIMBABWE – The International Finance Corporation (IFC) has partnered with Zimbabwe’s insurance regulator, the Insurance and Pensions Commission (IPEC), to create a market for agricultural insurance products in the South African market.
Through the partnership, IFC will assess the risks smallholder farmers face, how they are coping with those risks, and will gauge the farmers’ appetite for agricultural insurance to protect their livelihoods.
IFC will also help IPEC develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers.
Additionally, the financial institution will facilitate knowledge exchanges to help Zimbabwe’s insurance providers learn best practices from more developed agri-insurance markets.
This is aimed to overall protect smallholder farmers from weather-related crop damage and other shocks.
Agriculture is a significant contributor to Zimbabwe’s economy, employing almost two-thirds of the country’s working population and contributing about eight percent to GDP.
However, there are currently no insurance products in the country specifically designed to protect smallholder farmers.
IPEC Commissioner, Grace Muradzikwa stated, “One of our key roles as the regulator is to develop the insurance sector in Zimbabwe.
“This partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events such as drought, floods, heavy rainfall and heat waves.”
The Zimbabwe project will draw on the experience of the Global Index Insurance Facility (GIIF), through which IFC has supported the growth of agriculture/climate insurance markets in Cameroon, Cote d’Ivoire, Mozambique, Nigeria, Senegal, Zambia, and elsewhere.
GIIF is a multi-donor program managed by the World Bank Group. It was created to address the scarcity of affordable insurance protection against weather and catastrophic risks in emerging countries.
“Agriculture is central to Zimbabwe’s economy, but it is a risky endeavour that is becoming riskier as weather patterns become less predictable.
“IFC’s partnership with IPEC will reduce the risks for Zimbabwe’s farmers by developing the foundation of agriculture insurance in the country. Supporting the agribusiness sector is an important part of IFC’s strategy to promote private sector growth across Africa,” said Adamou Labara, IFC’s Country Manager for Zimbabwe.
IPEC develops agricultural insurance solutions that promote sustainable agriculture practices and benefit Zimbabwe’s smallholder farmers.
By increasing the penetration of agriculture insurance, IPEC expects the new program to speed up the adoption of more resilient and sustainable agriculture practices and boost livelihoods and food security.