One-Million-Dollar Crop Insurance Premium Paid to Protect Ghanaian Farmers.

Baku: A crop insurance premium worth one million dollars has been paid to the African Risk Capacity (ARC) to protect Ghanaian farmers whose crops were affected by this year's drought. The initiative is funded by the Global Shield Solution Platform (GSSP), an international non-profit organization focused on enhancing protection for vulnerable populations.According to Ghana News Agency, Madam Charlotte Norman, Director for Climate Change Adaptation and Disaster Risk Reduction at the National Disaster Management Organisation, announced this development at a GSSP-organized event during the ongoing COP29 in Baku, Azerbaijan. She stated that GSSP would cover the crop insurance premium for the next three years, after which the government would assume responsibility.Madam Norman highlighted the establishment of a database with relevant stakeholders to facilitate the registration and payout process as outlined in the contingency plan. The GSSP's payment offers a financial safety net, providing funds post-drought t o stabilize the economy and reduce the need for emergency budget reallocations. This approach allows for more predictable and planned drought responses, minimizing reliance on uncertain financial aid.With timely financial support, households are less likely to resort to negative coping strategies like selling assets or reducing food intake. Ghana is the first sub-Saharan African country to request this support and is the initial beneficiary. Apart from crop insurance, Ghana has developed a flood management product for Greater Accra, which is country-specific and ready for market introduction.Ghana's Northern region experienced a dry spell leading to significant cereal shortages, resulting in an estimated investment loss of GHS 3.5 billion and a revenue loss of GHS 10.4 billion. Mr. Lesley Ndlovu, CEO of African Risk Capacity Limited, noted that since its inception in 2012, ARC has paid over US$230 million in claims to various countries, with Zimbabwe, Zambia, Mozambique, and Malawi receiving US$70 million for disaster-related claims.Studies by experts, including the Intergovernmental Panel on Climate Change (IPCC), suggest that natural disasters will intensify, necessitating increased capital. Mr. Ndlovu praised Ghana's proactive approach to disaster risk financing through insurance, joining other African countries in the ARC mechanism.Ms. Annette Detken, Head of the Global Shared Solutions Platform, revealed that 17 more countries are set to receive climate risk funding. Countries like Malawi, Madagascar, Rwanda, Tonga, Samoa, Jamaica, Peru, and Pakistan are undergoing needs assessments and prioritization. She urged donors to contribute to the fund, which currently holds 200 million Euros from six donors: Germany, Denmark, Ireland, France, the European Union, and Luxembourg.The Global Shield is dedicated to providing better pre-arranged finance against disasters, while the African Risk Capacity, established in 2012 at the African Union's request, collaborates with countries to plan, prepare, and respond to natural disasters.