MALAWI’S government has received an insurance payout of $11.2 million to assist in recovery efforts following a devastating drought caused by El Niño. The funds were presented during a ceremony in Lilongwe, the nation’s capital, on August 2, and was attended by President Lazarus Chakwera.
The insurance payment, aimed at mitigating the effects of the severe drought, was made possible through the African Risk Capacity (ARC) Group, in collaboration with the African Development Bank (AfDB). The funds will provide critical support to nearly 235,000 households in the Lower Shire and Southern regions of Malawi, as well as cash transfers to 118,000 households in the Central region.
Speaking at the event, President Chakwera emphasised the significance of the payout, stating, ‘This insurance payout is not just a financial transaction; it is a lifeline for our vulnerable populations. It allows us to respond swiftly and effectively to the needs of our people, ensuring that no Malawian suffers the worst forms of hunger due to the recent dry spell conditions.’
The $11.2 million payout comes in response to the drought insurance policy held by the Malawian government and was financed by the AfDB through its African Development Fund and the Africa Disaster Risk Financing (ADRiFi) Programme Multi-Donor Trust Fund. This initiative is part of a broader effort by the ARC Group, an agency of the African Union, to enhance the capacity of African governments in preparing for and responding to extreme weather events and natural disasters.
The current El Niño, one of the strongest on record according to the World Meteorological Organization, has severely impacted Southern Africa, leading to drought conditions that have exacerbated food shortages in Malawi. The drought has been particularly harsh in the Lower Shire and Southern regions, which were already struggling with food insecurity due to prolonged dry conditions.
In response to the escalating crisis, the Malawian government declared a state of disaster in March 2024 and subsequently launched a National El Niño Response Appeal in April to gather resources for humanitarian interventions and boost food production.
Ibrahima Cheikh Diong, UN Assistant Secretary-General and Director General of ARC Group, highlighted the importance of preparedness in the face of such weather-related disasters. ‘The devastating El Niño-driven drought underscores the critical need for preparedness. The ARC mechanism has been crucial in facilitating timely interventions, and we are grateful to partners like the African Development Bank that enable African governments to participate in ARC risk pools.’
Dr. Yero Baldeh, Director of the Transition States Coordination Office at the AfDB, further emphasised the link between climate change and fragility, noting that the bank will continue to support government efforts to strengthen capacities for prevention, preparedness, and resilience against climatic shocks in Malawi.
The African Development Bank, through its ADRiFi Programme, has been instrumental in facilitating drought insurance payments across the region, including for the governments of Madagascar, Mozambique, Zambia, and Zimbabwe. By September 2024, the ARC Group is expected to have disbursed a total of $62 million in disaster risk insurance payouts to El Niño-affected countries in Southern Africa.
This latest payout to Malawi is part of a larger effort by regional and international organizations to address the ongoing impacts of climate change and extreme weather events on vulnerable populations in Africa. The support provided by the African Risk Capacity and the African Development Bank is seen as a critical lifeline for countries like Malawi, where the effects of climate change are increasingly severe.
As Malawi continues to navigate the challenges posed by the current drought, the insurance payout is expected to play a significant role in stabilising food security and supporting recovery efforts in the hardest-hit regions of the country.
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