ILRI launches new drought index insurance for resilience in the Sahel and Horn of Africa project

Camels carrying salt harvested in Afar, Ethiopia. A new drought index-insurance for resilience project is focusing on pastoral systems in the Sahel and Horn of Africa (photo credit:ILRI/ Fiona Flintan).

In the Sahel and the Horn of Africa, livestock provide a source of livelihood for millions of pastoralists and contribute significantly to national economies. Livestock generate about 54% of the agriculture gross domestic product in the Intergovernmental Authority on Development (IGAD) nations. However, many pastoralists in these countries are becoming more to vulnerable to natural disasters such as locust invasions, droughts and pandemics such as COVID-19. They are particularly affected by droughts which, fuelled by climate change, are becoming more frequent and severe across the region. Severe droughts have devastating effects on pastoralists, wiping out most of their livestock and leading to distress sales, which can leave herders without a source of food or income, pushing them to extreme poverty and vulnerability.

For over a decade, the International Livestock Research Institute (ILRI) and its partners in the public, private and non-profit sectors have carried out extensive research leading to the design of an index-based livestock insurance (IBLI) product to protect livestock keepers from drought-related asset losses. IBLI solutions have been successfully implemented in the arid and semi-arid areas of Kenya and Ethiopia since 2010. First piloted in northern Kenya in 2010, IBLI was adopted by the government of Kenya in 2015 under the Kenya Livestock Insurance Program (KLIP). In Ethiopia, IBLI was introduced in 2012 as a pilot in the Borana area, where the product has grown in popularity over the years. The success of the IBLI pilot in Borana means that it is now being considered as a model to learn from in different policy circles aimed at scaling up IBLI in the country. 

On 22 July 2020, ILRI launched a new Drought Index-insurance for Resilience in the Sahel and Horn of Africa (DIRISHA) project, focusing on pastoral systems in the IGAD region. The project was launched in a three-day online inception workshop attended by close to 100 participants from IGAD member states, the IGAD secretariat and its technical centres; and representatives from academia, donor organizations and research institutions globally.

Following the roll-out of IBLI-based programs in Kenya and Ethiopia, governments across the  Horn of Africa have shown strong interest in exploring and implementing IBLI solutions. Indeed, regional cooperation in the implementation of IBLI is considered critical to overcoming barriers to scaling up and ensuring long-term sustainability of index-based drought risk financing solutions. Various projects are being implemented to offer such solutions. However, mechanisms for the actual implementation and success of regional cooperation for IBLI solutions need to be investigated fully. There is a strong demand for a study addressing critical knowledge gaps related to the technical and operational feasibility of implementing IBLI at a regional level. The DIRISHA project is expected to contribute to bridging this gap.

Participants at the launch workshop were treated to various presentations covering topics such as the case for a regional approach for drought risk financing for pastoralists, quality assurance for disaster risk financing, the DIRISHA project design as well as quality index insurance certification. Participants also engaged in insightful plenary discussions, which will further shape the implementation of the project. Separate technical sessions were also held to further discuss and agree on specific work packages for the project.

ILRI acknowledges that the workshop only represented the start of the consultation processes. Interactions with thematic groups will be the main vehicle for soliciting technical advice and assistance. The DIRISHA project team will also undertake individual key informant interviews with a range of experts involved in the sphere of disaster risk financing. It will also hold in-person meetings with relevant senior technical personnel in IGAD member states.

About the DIRISHA project

DIRISHA is a two-phased research-for-development project funded with UK aid from the UK government. The first one-year phase started in June 2020. The project is being implemented by ILRI in collaboration with the Centre for Disaster Protection UK and in close consultation with the African Development Bank.

In its first phase, the project will assess the technical and operational feasibility of regional implementation of pasture-based livestock insurance. It will develop a harmonized and publicly available database at regional level, containing indicators of drought and socio-economic data that countries, donors, and insurance firms can use to assess the quality of prospective drought risk financing products and monitor their outcomes. It will also coordinate the development of new datasets of historical drought in pastoral areas and the design of sentinel sites where high-frequency data on rangeland and household conditions will be collected for use by the project and stakeholders to monitor and improve the drought risk financing tools.

The second phase of the project will inform effective implementation of regional livestock insurance schemes in the IGAD region. Moreover, building on the experiences and lessons learned from phase one, there is interest during the second phase to expand to the Sahel where country-level feasibility studies on opportunities for implementation of livestock insurance for pastoralists are being undertaken by ILRI.

For more information contact:

Francesco Fava, ILRI – Kenya, senior scientist, f.fava[at]cgiar.org

Yihenew Zewdie, ILRI – Ethiopia, senior scientist, y.zewdie[at]cgiar.org