Disasters in Sub-Saharan Africa can take a huge toll on vulnerable populations. The Horn of Africa drought and the recent Ebola crisis for example, have resulted in massive human suffering and tremendous financial burdens for governments with limited budget flexibility. This has made increasingly clear the need for more sustainable humanitarian and development financing.

On a household level, the impacts of disasters are equally detrimental because the populations most affected tend to be the poorest. In January 2015, the most affected regions of Malawi following massive floods had poverty rates of 75% or more (measured at $1.25 per day). This offered a stark contrast to the average poverty rate of roughly 40%.  As the effects of climate change shift rainfall patterns across Africa, there is an even greater need to better manage the fiscal shocks associated with natural disasters.

Unfortunately, the African continent faces disasters far beyond floods and droughts.  The East African Rift Belt (running from Ethiopia to Malawi) is a source of earthquakes and volcanic eruptions. Tropical cyclones bring strong winds and thunderstorms to the South East African region.  Meanwhile, coastal erosion rates in West Africa can grow tens of meters per year, forcing vulnerable communities to resettle. Landslides are common throughout Sub-Saharan Africa, events that often occur without warning, damaging infrastructure and costing lives.

Sub-Saharan Africa has responded to these threats, making progress to manage the socio-economic costs of disasters. This has included agriculture insurance in Kenya, the development of disaster-responsive social protection systems in Uganda, and the efforts of the African Risk Capacity (ARC) risk pool which provided sovereign-level drought insurance for four countries last year.

To complement these efforts the European Union (EU), the Global Facility for Disaster Reduction and Recovery (GFDRR), and the World Bank Group jointly launched the Africa Disaster Risk Financing (ADRF) initiative at the Understanding Risk and Finance Conference in Addis Abba on November 17, 2015. This five-year initiative, valued at 20 Million Euro (US$22.7 million), expects to:

• Strengthen the capacity to generate, access, and use information on disaster risk to develop strategic financial protection and risk reduction programs.
• Enhance capacities to incorporate disaster and climate risk information in decision making.
• Develop strategies to increase financial resilience against natural hazards.
• Facilitate sharing of knowledge and best practices on risk finance solutions relevant for African countries.

ADRF is part of a new Building Disaster Resilience in Africa program, an Initiative of the Africa, Caribbean and Pacific (ACP) group of States, financed by the EU, and implemented by the African Union Commission (AUC), the United Nations Office for Disaster Risk Reduction (UNISDR), the African Development Bank (AfDB), GFDRR, and the World Bank. To ensure that this program has the greatest possible impact, activities are underway in a number of countries. For example, national multi-hazard risk information is being created using low-cost new approaches in Senegal, Ethiopia, Uganda, Niger and Kenya. This information, which will be available on open platforms, will enable us to quantify the direct loss from disasters today and into the future (considering climate change, urbanization and population growth), and will provide a powerful tool for Governments to objectively prioritize efforts to turn the tide on growing disaster losses through targeted investments, financial planning and so forth.

Similarly, new analysis focuses on uncovering the impact of floods and droughts on poverty at the household level in Malawi and Uganda. With this in mind, mobilizing citizen participation and investing in empowering them though education was also a key discussion topic. Mary Mye-Kamara, Head of Disaster Management in Sierra Leone and conference participant, emphasized the significance of involving the people in risk discourse by stating, “It is important for the communities themselves to really get involved in the process because when they are fully knowledgeable about the situation, when they are fully knowledgeable about the risks involved, then perhaps it puts us in the better position to break boundaries, to break barriers, even cultural practices… Today knowledge is still power. When the people know what the risks are, when the people know how they can change the circumstance, then I think they will be in a better position, really, to fully support the process. Informing the people is key in involving them in the implementation in many of these programs.” Innovative approaches to citizen engagement in Malawi, Comoros and Madagascar are also being formulated by creating new map data to enhance disaster preparedness.

The ADRF team is also in discussions with Government officials in Madagascar and Mozambique on how to improve access to emergency funding, which will support government institutions to respond more quickly during disaster events. Dr. Stefan Dercon, professor of economic policy at Oxford University, reinforces the importance of building such dialogs with political leaders by stating, “It’s never too early to start planning and thinking through [risk]... What you can do to the policy maker is explain the cost-benefits of actually spending a bit earlier and the cost of not responding early. We have some really strong figures that early response, for example, in drought in Ethiopia will actually reduce the cost by half or more compared to only responding when the drought is already going on. So you need to be ready from day one to be able to respond properly.”

The Understanding Risk and Finance conference in late November 2015, served as a platform where African policy makers met to discuss effective strategies and approaches for quantifying and managing financial risk at a regional, national, and local levels. The conference hosted around 450 participants and a wide range of African partners including AfDB, Addis Ababa University, African Risk Capacity, along with 20 additional organizations, including private sector firms and insurance companies. Of the 95 speakers at the conference, 65% were from the Sub-Saharan region and 33% were women. Regional participation in this conference spoke to the commitment of African Nations to improve financial response capacity and to mitigate the socio-economic, fiscal, financial and physical impacts of disasters through knowledge sharing and promoting opportunities for collaboration. 

Jointly organized by the World Bank Group, the GFDRR, the EU, the African Union Commission and Government of Ethiopia, in close cooperation with the AfDB, the ARC, United Nations agencies, this conference provided a strong foundation for future ADRF engagement in building financial resilience in Africa. 

The next Understanding Risk Conference will be held May 16-20 2016 in Istanbul, Turkey. For more information, please visit the Understanding Risk website.