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Chuks Udo Okonta
The International Finance Corporation (IFC), World Bank Group has earmarked $970.000 for the development of agriculture insurance in Nigeria.
This was revealed in a document obtained from IFC Project Information and Data Portal. The Corporation stated that an estimated total budget of $970.000 was earmarked for all project-funded activities.
The financial commitment it said hinges on its new Africa Inclusive Insurance Program, which will run to June 2025 and will engage insurance sector clients in 14 countries across the continent to strengthen the resilience of over five million small holder farmers and MSMEs to climate-related and other shocks.
On the project description, IFC stated that this project builds on lessons learnt from past IFC projects (such as #600563) and information gathered from a wide range of insurance stakeholders in Nigeria to define interventions that would ramp up the outreach of inclusive insurance.
IFC noted that it has access to experienced technical staff and consultants who have the capacity to successfully deliver project activities, adding that activities will be organised around the following main components: Component 1: Development of inclusive insurance products and capacity building under this component and that it will provide advisory services for the development of new climate insurance products and risk analytics; the enhancement of existing products; the strengthening of insurers’ business development and underwriting capacity and the enhancement of the regulator’s supervisory capacity.
Component 2: Development/promotion of strategic partnerships and and digital solutions. It said the overall objective of this component is to establish more diverse, efficient and sustainable insurance product distribution channels and insurance processes.
Component 3: Knowledge management and visibility and activities, stating that under this component, it will focus on Knowledge Management which will cut across the other components of the program, adding that knowledge management activities will include producing online and other publications on lessons learnt, thought leadership on best practice in climate insurance, research on emerging technologies, social media messages, and impact stories. It will also involve the organisation of exchanges, for example South-South exchanges between IFC partners in Asia and Africa, exchanges between insurance practitioners from different African countries, and exchanges with other international organisations and donor-funded programs.
Cross section of participants at the 2022 Africa Re. agriculture insurance workshop in Lagos.
Financial Sector Specialist, Global Index Insurance Facility, IFC, Sharon Onyango, while speaking on the topic, IFC’s Agriculture Insurance Initiatives in Africa, at the just concluded 2022 Africa Re. Agriculture Insurance Workshop in Lagos, submitted that between 2015 and 2020, IFC’s index insurance interventions facilitated:
Issuance of policies to over 5 millions mall holder farmers by clients beneficiaries in 5 countries. Generation of over $45 million in premium by (re) insurers. Attracting 26 private insurance companies into the market.
Supporting development of partnerships between insurers and public sector players to embed insurance in agriculture sector development programs – the farmer input support program in Zambia where over 1
million farmers receive insured inputs each year.
Continuing, she said the Corporation also engaged in supporting development of partnerships between insurers and IFC
agribusiness and microfinance clients (e.g.,1agribusiness client in
Mozambique and 1M FI in Cameroon). Engagement with regulators across different countries – IPEC; PIA; NAICOM; CIMA region regulator and thought leadership and knowledge sharing through publications and learnings (e.g., this risk modeling handbook)
She maintained that IFC insurance support for Nigeria will be at the following levels:
Research and preparatory activities; insurer engagement; identify interested insurers; conduct due diligence and conduct needs assessment.
It would include market level supports, which entails, activities targeting groups of insurers and farmer aggregators; capacity building –broad agriinsurance and climate risk assessment concepts; knowledge exchange on best practice and awareness rasing.