African Union African Risk Capacity ARC Briefing Book Rockefeller Foundation

African Risk Capacity (ARC)

Briefing Book

AFRICAN UNION

African Risk Capacity - ARC Sovereign Disaster Risk Solutions A Project of the African Union

ARC BRIEFING BOOK

Contents

Section 1 ndash An Introduction to the African Risk Capacity Project 1 What is the African Risk Capacity (ARC) 2 Tanzania Brief 3 Chairperson of the African Union Commission HE Dr Jean Pingrsquos Comments on the ARC

ldquoSheltering the Most Vulnerablerdquo Editorial Financial Times This is Africa SeptOct 2011 68-69 Print

Section 2 ndash A Closer Look at the African Risk Capacity and Africa RiskView Software 4 ARC Summary Note 5 Africa RiskView Technical Bulletin 6 East Africa Brief 2011

Section 3 ndash Diplomatic Notes and Policy Decisions 7 Note Verbale on the ARC to All Member States of the African Union 8 Aide Memoire on the ARC 9 Decisions taken on the ARC by African Ministerials and Policy Organs of the African Union

AFRICAN UNION

Dr Joanna Syroka Senior Programme Advisor E-mail JoannaSyrokawfporg Mr Shadreck Mapfumo Head of Risk Management amp Capacity Building E-mail ShadreckMapfumowfporg

Dr Richard Wilcox Managing Director ai E-mail RichardWilcoxwfporg Ms Fatima Kassam Chief of Governmental Affairs and Policy E-Mail FatimaKassamwfporg

African Risk Capacity Project Team Please feel free to contact us with any comments or questions wwwafricanriskcapacityorg


SECTION 1 An Introduction to the African Risk Capacity Project

1 What is the African Risk Capacity (ARC)

This one-page document describes the ARC which is envisaged as an African-owned standalone financial entity that will provide African governments with timely reliable and cost-effective contingency funding in the event of a severe drought by pooling risk across the continent

2 Tanzania Brief

This brief provides an overview of how Africa RiskView (ARV) can be used to analyse the potential impacts of drought in Tanzania and highlights the role the African Risk Capacity (ARC) risk pool could play in insuring against such risk

3 Chairperson of the African Union Commission HE Dr Jean Pingrsquos Comments on the ARC

This Op-Ed was recently published in the Financial Times This is Africa magazine outlining the ARC as an African solution to one of the continentrsquos most pressing challenges that utilizes modern financial tools and cutting-edge technologies while decreasing our dependence on external aid

AFRICAN UNION

Dr Joanna Syroka Senior Programme Advisor JoannaSyrokawfporg Mr Shadreck Mapfumo Head of Risk Management amp Capacity Building ShadreckMapfumowfporg

Dr Richard Wilcox Managing Director ai RichardWilcoxwfporg Ms Fatima Kassam Chief of Governmental Affairs and Policy FatimaKassamwfporg


African Risk Capacity (ARC) Sovereign Disaster Risk Solutions A Project of the African Union

The African Union Commissionrsquos Department of Rural Economy and Agriculture with technical assistance from the UN World Food Programme (WFP) has initiated the African Risk Capacity (ARC) Project to design and establish a pan-African risk pool called the ARC ARC is envisaged as an African-owned standalone financial entity that will provide African governments with timely reliable and cost-effective contingency funding in the event of a severe drought by pooling risk across the continent

In light of climate change and the rising potential for climate variability developing mechanisms that prevent the escalating impact extreme weather events remains an urgent priority Designed to improve the efficiency of current drought responses ARC will enable countries to provide more timely assistance to affected vulnerable populations protecting development gains and reducing the short- and the long-term costs of assistance The key benefits would be to speed the early flow of funds to a country based on objective triggers enabling government response actions that reduce dislocation and the negative impact of a disaster on the lives and livelihoods of the vulnerable It could prevent disruptions to other critical country programmes due to reallocation of limited budget resources and reduce dependence on international appeals for assistance The ARC would be one of several tools available to governments to respond to disasters and would seek to only partially fund the disaster needs of countries Each participating country in advance of joining ARC would create a contingency plan identifying how ARC funds would be optimized to assist those affected

How it Works ARCrsquos objective is to capitalize on the natural diversification of weather risk across Africa allowing countries to manage their risk as a group and secure funds from donors and the international risk market in a financially efficient manner in order to respond to probable but uncertain risks ARC will utilize modern financial mechanisms like risk pooling and risk transfer to establish the contingency financing facility These techniques while not new can be applied by African countries in innovative ways to lower the cost of the response to disasters before they become humanitarian crises and provide better services to those affected If ARC is established

Initial contributions from member countries and donors will form the capital in the pool and

countries will pay an annual premium to participate

ARC will use defined rules to calculate country premiums and allocate payouts to member countries

based on predetermined and transparent rules for payment

Countries can elect the level at which they wish to participate by selecting the amount of risk they

wish to retain and financing they would want from ARC for droughts of various severity

Contingency plans for how to optimize ARC disbursements will be a prerequisite for participation and

take into account existing mechanisms priorities and needs of each participating government

ARC will implement a solvent and sustainable financing strategy by combining reserves with

financing and risk transfer instruments from IFIs and international markets

Payouts from ARC Rules for payout from ARC will be identified up front accurately reflect losses faced by member countries allow payouts to occur promptly as soon as it is clear the rains have failed and be based on objective and transparent criteria To establish these rules WFP has developed a software application Africa RiskView (ARV) which translates satellite-based rainfall information into near real-time response cost estimates Because of this ARV can serve as the technical engine for ARC providing guidance to governments on risk transfer level options risks assessments to facilitate contingency planning and identifying based on objective criteria and once ARC risk transfer parameters are set when payouts are due to a country In addition quantification of risk and cost of participation can create better incentives and benchmarks for investment in DRR and other instruments to inform comprehensive and efficient national risk management strategies

Summary ARC will provide an objective financing facility that can be used to quantity risk and provide immediate liquidity to countries affected by drought By merging the traditional approaches of disaster relief and quantification with the concepts of risk pooling and risk transfer ARC will help create a pan-African drought response system that meets needs of those affected in a timelier and more efficient way and provide an important step forward in creating a sustainable African-led strategy for managing extreme climate risks



African Risk Capacity Project Team Please feel free to contact us with any comments or questions

AFRICAN UNION

AFRICAN UNION

Country Brief Tanzania Africa RiskView

Drought Indicator Map (2010-2011)

Seasonal Performance

In Tanzania more than 70 percent of the population lives in rural areas and depends on rain-fed agriculture As such the livelihoods of millions of Tanzanians are vulnerable to droughts which have been among the most common natural disasters in Tanzania in recent years There have been significant drought events since 2000 with the most severe crisis occurring in 200506 when food and cash crop production fell by over 50 percent Because of Tanzaniarsquos dependence on rain-fed agriculture and traditional cultivation practices risk management planning for drought remain a major food security issue

The Government of Tanzania has made significant strides in climate resilience and disaster adaptation The Government developed the National Operational Guidelines for Disaster Management in 2003 and the National Disaster Management Policy in 2004 to guide disaster risk reduction efforts Interventions are currently led by the office of the Prime Minister through the Disaster Management Department and the National Disaster Relief Committee These departments additionally work with the Ministry of Food Security and Co-operatives which manages strategic grain reserves and the Food Security Information Team an advisory body which provides crop and vulnerability assessments ARV could complement these existing and useful initiatives through additional data analysis and forecasting further enhancing the Governmentrsquos ability to quickly and effectively respond to climate-related disasters

The map below from ARV illustrates what occurred in 200506 with Tanzania experiencing below average rainfall in 85 percent of its districts A vulnerability assessment conducted in 2006 by the Government non-governmental organizations and UN agencies estimated that over 37 million people were affected in total by this drought As the chart on the following page shows these estimates are in line with the ARV estimates that showed 35 million people affected by this drought


The map shows the drought index deviation from normal during the October 2005 to April 2006 main rainfall season The yellowred portions indicate areas that suffered from drought while the green areas experienced normal or above average rainfall

Introduction

This country brief aims to provide the Government of Tanzania an overview of how Africa RiskView (ARV) can be used to analyze the potential impacts of an adverse rainfall season on crop production and populations as well as highlight ARV capabilities for determining appropriate risk transfer parameters for the African Risk Capacity (ARC) risk pool This brief is divided into three primary sections

Seasonal Performance Recent climate agriculture and risk management trends in Tanzania

Vulnerability and Populations Affected ARVrsquos estimations and historical data

Risk Transfer Historical payouts and benefits of risk pooling

Disclaimer All Africa RiskView products are a work in progress subject to change at any time and shown for illustration only and are not to be shared further WFP and contributing donors make no representation or warranty of any kind whether express implied or statutory as to the accuracy or fitness for a particular purpose of the products and information contained within Africa RiskView or this brief In no event shall WFP nor contributing donors be liable with respect to any subject matter presented here

Poor rains

Below average

Normal

Above average

Far above average

AFRICAN UNION


Vulnerability and Populations Affected

Based on ARVrsquos estimates and shown in the chart below 31 of the Tanzanian population is vulnerable to severe drought with smaller proportions vulnerable to mild and medium droughts In addition ARVrsquos estimates of drought affected people in Tanzania show a correlation of 60 with WFP historical data which is presented in the chart on the right More refined data broken down by season and covering non-WFP assistance ndash eg WFP only assisted 500000 of the estimated total 37 million affected people in 2006 ndash and past drought assessments will further improve the model WFP houses a repository of historical operations data which is a good base to start comparisons but other factors such as fund availability and pipeline breaks as well as other non-drought related food security needs also impact operations Additional information on progress made in other national risk management initiatives in recent years and updated population vulnerability data will also help to customize the model for Tanzania

Country-Level Vulnerability to Drought People Affected Estimated by ARV

Risk Pool Discount and Potential Programme Costs and Payouts

The table to the left illustrates the potential premium savings that Tanzania could enjoy by joining the ARC drought risk pool The table assumes 12 other countries across Africa also participate with the same return period and cover the costs of droughts that occur with a higher frequency through other means The maximum ARC payout is set to correspond to the cost of a 1-in-50 year drought minus the cost of responding to higher frequency events not covered by ARC As the return period increases ie the probability of payout decreases the premiums (as a fraction of the maximum payout) drop with savings reaching 57 of the market premium rate

The graph to the left shows the potential historical payouts that Tanzania would have received had they been part of the ARC risk pool since 2000 and insured their main October-April rainfall season ndash this does not include the bimodal rainfall seasons in the north The year on the x-axis indicates the starting year of the season A 1-in-10 year payout period is assumed Funding from ARC could be used to scale-up safety programmes in a predictable manner or support the effective operation of the countryrsquos strategic grain reserve

0

10

20

30

40

50

60

70

80

90

100

Vulnerability to Mild Drought

Vulnerability to Medium Drought

Vulnerability to Severe Drought

-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Estimated by ARV WFP Historical Record

Return Period (Years)

Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary

Historically Tanzania has suffered from droughts which have severely impacted the population ARV estimates that if a drought with the same severity of the 200506 drought occurred today it would still create some type of livelihood stress for over 35 million people

ARV estimates of population affected have shown a relationship with historical emergency needs in Tanzania This shows that ARV methodology could be appropriate for estimating future seasonal outcomes but it needs to be customized by government and its partners

The Tanzanian Government can select a risk retention level which best fits its disaster strategy and reduce the overall cost of risk transfer by entering into a risk pooling arrangement through ARC

$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000

68 This is Africa This is Africa 69

Perspectives

Jean Ping

sheltering the most vulnerable

Six months from now the worldrsquos leaders will gather in Durban South Africa for yet another

round of negotiations on the challenges and opportunities posed by climate change ndash who is responsible for the phenomenon what should be done to address its effects who should pay for the necessary adaptation and mitigation measures how much and to whom the bill is due

Every party will bring evidence it considers indisputable to support its own position as it enters the meeting rooms a flurry of papers an incessant flow of speakers and the low din of sidebars from the corners of the room It is easy for us to become detached in such an

environment but we must not forget the reason we are there

It is widely acknowledged that Africa responsible for barely 4 percent of global greenhouse gas emissions bears the brunt of climate change But that burden is not borne by people like me and you The most vulnerable populations on this continent with the most limited capacities to cope shoulder the burden of climate risk For this silent majority Africarsquos agenda is ldquoDevelopment Firstrdquo ndash inclusive sustainable development

Across the continent the agricultural sector still employs about 90 percent of the rural poor Approximately two-thirds of the population of sub-Saharan Africa resides in rural areas and most are dependent on rain-fed agriculture and rangeland ndash subject to the vagaries of the weather Strong links exist between the agricultural sector and other sectors of the economy intertwining rural and urban poverty Some studies even suggest that an additional dollar in farm income contributes to a two or three dollar increase in national per capita income These people often ignored are indeed the engine of our economies

The increased frequency of extreme weather events driven by climate change and climate variability we fear will result in increased risk of hunger and malnutrition in Africarsquos most vulnerable populations As currently structured the system for responding to natural disasters is not as timely or equitable as it could be Funding is secured on a largely ad hoc basis after disaster strikes and only then can relief be mobilised toward the people who need it most

In the meantime lives are lost assets are depleted and development gains reversed ndash forcing more people into chronic hunger malnutrition and destitution across the continent

We must break out of this cycle We now have empirical data about the effects of drought the cost savings of well-timed responses early warning technology as well as basic rural social safety nets in many countries There are modern financial tools that allow us to transfer the burden of climate risk away from the farmers and pastoralists least equipped to shoulder it to the international financial markets that can handle it much better We rely on cost-ineffective ad hoc charity for each disaster while developed countries use insurance-like risk management systems So why donrsquot we

The African Union has taken a decision to accelerate action in this regard under the African Risk Capacity projectARC would provide participating governments with prompt funds in the event of a natural disaster These contingency funds would be triggered by satellite readings rather than on-the-ground needs assessments ensuring the quick disbursement of cash when and where it is needed most African governments would then be equipped to respond to the most vulnerable before they begin depleting their limited assets in order to cope

The World Food Programme has helped us develop Africa RiskView which allows us to manage Africarsquos drought risk as one financial portfolio Based on Africa RiskView the ARC demonstrates the efficiency

of pan-African solidarity in approaching the

challenges of climate change in line with the continental agenda By pooling weather risk across the continent

member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen

take advantage of cost-savings resulting from diversification of the risk portfolio

Approaching the international risk markets as a group will save us up to 50 percent savings that we can then invest in longer-term development projects Innovative projects like the ARC go a long way towards ensuring the availability of adequate and predictable financial resources critical for development progress in Africa

We stand at a historical crossroads facing complex economic social and technological choices that will allow us to ldquoleapfrogrdquo carbon-intensive phases of development to cleaner greener more advanced land-use solutions Yet climate change threatens both our pace of progress and the assets we have already accumulated in the past decades of growth

Here on the continent we are resourceful resilient and positive despite overwhelming challenges I have a lot of hope and optimism about the negotiations that will occur on African soil I believe we will move forward significantly on some of the important elements of the multilateral climate framework building on what was agreed in Cancuacuten in 2010

The African Risk Capacity is a central pillar of Africarsquos climate change adaptation strategy It promises to use existing disaster funds more effectively and can absorb climate-related disaster funding at scale and in a cost-effective manner We are ready to face the challenges of climate change adaptation head on and together with our partners are looking forward to transitioning from managing crises to cost-effective risk management for the greater benefit of the citizens of Africa

Jean Ping is the chairperson of the Commission of the African Union He was previously the foreign minister of Gabon from 1999 to 2008 and served as president of the United Nations General Assembly from 2004 to 2005Ph

oTo

co

rb

is


SECTION 2 A Closer Look at the African Risk Capacity and Africa RiskView Software

4 ARC Summary Note

The African Union Commission (AUC) is undertaking a study of design options for the African Risk Capacity (ARC) The study will explore institutional legal and financial options for structuring such an entity and present ideas about ways for countries to participate The AUC has secured support for this risk sharing initiative from African Heads of State and Government and is beginning to discuss the ARC concept with its membership at the technical level This thirteen-page note outlines the ARC design work to date and the concept behind this type of risk pool in order to facilitate discussion and feedback from experts during design phase consultation meetings

5 Africa RiskView Technical Bulletin

The objective of this seven-page note is to provide more detail on Africa RiskView (ARV) the technical engine for ARC ARV is a software application developed by the UN World Food Programme (WFP) that provides a transparent system to estimate crop losses and the impact on populationsrsquo food security from future droughts for Sub- Saharan African countries

6 East Africa 2011 Brief This three-page document provides an overview of how Africa RiskView (ARV) can be used to analyse the potential impacts of an adverse rainfall season on crop production and rangeland in East Africa including the Horn countries In addition the brief highlights the role the African Risk Capacity (ARC) risk pool could play in insuring against these risks using the 20102011 seasons as an example

AFRICAN UNION

ARC Summary Note Prepared by African Risk Capacity Project Team


SUMMARY NOTE

The Commission of the African Unionrsquos Department of Rural Economy and Agriculture with technical assistance from the UN World Food Programme (WFP) has initiated the African Risk Capacity (ARC) Project ARC is envisaged as an African-owned standalone financial entity that will provide African governments with timely reliable and cost-effective contingency funding in the event of a severe drought by pooling risk across the continent ARC could eliminate delays responding to disasters due to a lack of funding and prevent disruptions to other critical country programmes due to reallocation of limited budget resources ARC would seek to only partially fund the disaster needs of countries and each participating country in advance of joining ARC would create a contingency plan identifying how ARC funds would be optimized to assist those affected The African Union Commission (AUC) (1) is undertaking a study of design options for the African Risk Capacity (ARC) The study will explore institutional legal and financial options for structuring such an entity and present ideas about ways for countries to participate The AUC has secured support for this risk sharing initiative from African Heads of State and Government and is beginning to discuss the ARC concept with its membership at the technical level This note outlines the ARC design work to date and the concept behind this type of risk pool in order to facilitate discussion and feedback from experts during design phase consultation meetings

a) Background

Weather is inherently variable and weather shocks are an ongoing risk across the continent The Horn of Africa particularly Somalia is currently experiencing its worst drought in decades and the impacts of recent widespread droughts (200910 20045 and 20022003) have also not been forgotten Policy makers are acutely aware of the risk of similar events in the future Analysis suggests that a widespread catastrophic drought in sub-Saharan Africa today could cost upwards of US$3 billion in emergency assistance costs (2) In addition climate change is likely to introduce a higher incidence of erratic rainfall and high temperatures creating a risk that more droughts with potentially stronger severity may occur in the future

The current model for responding to drought is plagued by a number of challenges and the high and unpredictable cost of these events strain governments and donors Paramount among these problems are the inefficiencies and delays in delivering funding for responses that lead to household asset depletion (ie selling livestock or other productive assets) which can make recovery much more difficult In almost all cases some time lag occurs between the disaster and the availability of resources to deal with the impacts

Only after funds are raised often through traditional appeals for aid can a response be mobilized to reach those trying to cope with the impact of crop or other losses In many cases uncertainty about funding and timing of responses leads to the diversion of resources from other important programs Finally the donor-driven approaches to disaster financing crowd out national capacity and autonomy for managing drought-related issues Given the desire of African governments to have greater ownership of disaster response and the continued constraints on aid budgets there is an immediate need to increase the efficiency of emergency assistance

(1) This project benefits from technical assistance from the UN World Food Programme (WFP) and support from the Rockefeller Foundation the UK Department for International Development (DFID) the Global Facility for Disaster Reduction and Recovery (GFDRR) and the International Fund for Agricultural Development (IFAD) (2) WFP staff analysis

AFRICAN UNION


To do this it is not necessary to replace existing responses employed by governments and donors but rather enhance these activities using modern technologies and innovations Risk management techniques such as risk transfer and risk pooling while not new can be applied by African countries in innovative ways to lower the cost of the response to disasters before they become humanitarian crises and provide better services to those affected Early planned reliable and appropriate interventions in the event of weather-related emergencies could help reduce the negative impact of a disaster on the most vulnerable protecting human social and economic development and reducing the short- and the long-term costs of assistance When coupled with adequate contingency plans quick-disbursing funding can help protect the lives and livelihoods of the most vulnerable lowering the total cost of assistance and protecting development gains Evidence suggests that helping people quickly before they sell assets creates five times more value to vulnerable populations than traditional aid which is raised after the disaster strikes and arrives much later Using an indicative but conservative model estimates show that a contingency fund of US$250million could save African countries and donors nearly US$1 billion in cash over 20 years (3) Given the potential benefits of quick disbursing funds as part of its priority agenda the AU has highlighted the need to develop Member Statesrsquo capacity to financially manage weather risks more effectively and independently In light of this an initial concept for ARC the African Union Commission is developing a pan-African risk pool which would provide participating governments in Africa financial tools and funds to response to predictable natural disasters across the continent (4) The project builds on past work with African countries on national weather risk management (Annex 1)

b) Objectives

The goal of ARC is to create a facility that would allocate certain resources against probable but uncertain risks These funds would be based on pre-defined rainfall related triggers specified by each country In this way ARC would act as a pan-African contingency funding mechanism for extreme weather emergencies initially providing coverage for severe drought but expanding to other weather risks such as flood at a later stage Contingency funds here are defined as quick-disbursing funds that are secured ex-ante ndash that is before hand ndash to be triggered and released by an event There are three objectives of ARC which taken together represent a new way of responding to drought-related emergencies across the continent

African governments gain access to a set of tools that provide a summary of risks as well as a

quantification of costs and impacts of drought at district national and regional levels

African governments through the risk pool establish and manage a dedicated quick-

disbursing contingent funding mechanism that strengthens the continentrsquos ability to

respond and improve disaster planning

African governments join in solidarity to pool risks across the continent thereby reducing

the cost of insurance coverage for severe and catastrophic events

(3) Economic Appraisal ARC Project Memorandum WFP (4) The recent Conference of African Ministers of Finance on March 28-29 2011 in Addis Ababa adopted Resolution L-5 that welcomed ldquothe African Union Commissionrsquos proposal to work towards the establishment of the African Risk Capacity (ARC) an African-owned pan-African disaster risk pooling facility that would provide contingency funds to participating AU Member States in the event of extreme weather shocksrdquo and endorsed consultation with AU Member States on the findings of the ongoing ARC feasibility design study


The ARC would be one of several tools available to governments to respond to disasters in a timely and planned fashion helping governments to build comprehensive national disaster risk management and disaster risk reduction (DRR) strategies ARC funding for responses to drought risk could complement investment in climate change adaptation agricultural production and market development The key benefits of ARC will be to speed the early flow of funds to a country following a disaster based on objective triggers enabling government response actions that reduce the dislocation caused by such events and the dependence on international appeals for assistance

c) Risk Pooling

ARC will enable African countries to secure contingency funds for drought events by capitalizing on the natural diversification of weather risk across the continent through a risk pool A risk pool is a mechanism where individual risks are transferred and combined That pool then takes on the risk profile of the group rather than the risk profile of each individual risk combining the uncertainty of individual risks into a calculable risk for the group By looking at the probability that an event will occur in a year the correlation of risks and the likelihood that a drought event will happen at multiple countries in the same year it is possible to determine the probability of payouts for the entire pool and therefore the funds required to service those payouts Using health insurance as a model if the cost of treating a person with influenza is $50 per illness and an insurance company expects 1 in 10 people to get the flu in a year an insurance company can insure a 100000-member group of people against flu if they collect $500000 (ie $50 x 10000 sick people) or $5 per person in that group By agreeing to pay the cost of each sick person in exchange for the $5 payments from everyone in the group the insurance company has effectively pooled the risk of the group and reduced the insurance costs of all its participants Similar to the example AU member countries can pool resources to compensate countries that are affected by drought when others are not in a given year which would reduce significantly the risk management costs faced by countries and donors who support them Initial analysis shows it is unlikely that extreme weather events such as drought will happen simultaneously in the same year in every country since there is some diversification in the performance of rainfall seasons across Africa Therefore the sum of the contingent funds each country would need to have in reserve in order to be able to respond to an extreme drought emergency that year is substantially greater than the contingency funds required by a group of countries to respond to its worst case scenario Preliminary findings indicate a 50 saving from diversification of drought-related losses across Africa ie a 50 reduction in the contingent funds needed if the risk is pooled among nations and managed as a group rather than borne by each country individually The Caribbeanrsquos risk pool (see Annex 2) saved participating countries 45-50 in risk transfer costs by approaching the international risk market as a group

1 Overview

In principle a risk pool for Africa is feasible However whether a pool can be established cannot be determined a priori and depends on the outcomes of several interactive and interrelated processes with the national governments and other stakeholders involved In particular to be feasible two key components are required 1) a method to assess risk and then the tools to devise a solvent and 2) sustainable financial strategy to manage that risk These components are already available and are outlined below In order to move forward with implementing these components and actually establishing a risk pool other information on country participation and donor support is required which will be discussed in the next section


Figure 1 Illustrative example of risk pooling potential for drought risk across Africa using Africa RiskView estimates for the worst-case drought response cost for each country by season (see below) As more country drought risks by season are added to the pool (across the x-axis of the graphic) the difference between the estimated worst-case drought scenario for the pool versus the cumulative worst case drought scenario of each country in the pool becomes more evident The difference between the red and blue lines at any point expresses the degree of risk pooling for that group of countriesseasons When all countries by season considered by Africa RiskView are included in the pool (42) the risk pooling factor is 52 ie the risk pool worst case drought response costs estimate is less than half the size of the cumulative sum of the worst case drought response costs estimates for each country included However it is clear from the graph above that risk pooling of a similar magnitude is evident when only a few countries are added to the pool and remains above 35 after four countries added to the pool To create the figure above countries have been added to the pool alphabetically and worst-case drought response costs are estimated on the basis of 15 years of historical Africa RiskView data Further work is ongoing to stress the robustness of these results with additional data and statistical techniques

a) Financial Strategy

The financial strategy envisioned for ARC once it is established focuses on two major criteria solvency and sustainability Solvency means a risk pool that can in nearly all cases make the required payouts to participating countries in full should a catastrophic drought scenario occur where many of the pool participants have been impacted by severe drought in the same year and are all due large ARC disbursements For the purposes of the feasibility study a recommended solvency target is a pool that 99 of the time has enough funds to payout each country due a payment in full This is a minimum threshold that is usually required for a financial entity like the pool to be considered solvent In addition in order to be considered sustainable the risk pool would have to be able to remain functioning for many years in a row despite making ongoing payouts As an example the pool would have to be able to make the payouts to countries affected by several serious drought events but without depleting its own reserves For the


purposes of the feasibility study the recommended sustainability target will be a pool that has a 50 probability of having the same level of reserves or capital after 10 years in operation In other words it has the same probability of survival for another 10 years after the first 10 years is completed (5)

ARC will need to deploy a financial strategy to ensure the pool can honor disbursements to countries in any given year and is able to project a clear path to self-sustainability beyond donor and international organization support over several years The pool will have funds from contributions of the participating countries in the form of annual participation fees or premiums and from initial contributions to the pool from donors to execute this strategy ARC payouts would be based on a set of objective rules that are country specific to ensure these contributions are fair equitable and sized appropriately for the risk ARC is to cover Each country would define the severity of drought as defined by a rainfall-based formula specific to their country for which they want compensation and the amount of compensation they would need in each case To ensure that the potential liabilities of the risk pool are clearly defined going into each risk season these rules must be identified up front Participating country contributions will be linked to these rules and the probability of the country receiving a payout in the season ahead These solvency and sustainability objectives can be achieved using a variety of different financing approaches and instruments which already exist and are being used for risk management around the world for example in the Caribbean risk pool (see Annex 1) These can include the coordinated use of risk retention risk transfer and contingent financing from international financing entities to create a layered financing structure within the pool and also within participating countries themselves

A Layered Approach to Risk Management Layer 1 Retention by Country Participants ndash Members could retain risk by choosing to only receive

compensation from ARC for drought events that are more extreme and less frequent Members would

use existing resources and programs to manage the impact of less severe localized or frequent events

in country

Layer 2 Risk Pool Reserves (ARC Retention) ndash It is anticipated that reserves layer of the pool could be

based on contributions of the participating countries in the form of annual premiums in addition to

initial donor capitalization These funds could create a pool of resources available for payouts in the

same ways that insurance premiums provide a pool of funds for insurance companies to pay insured

client claims A simple way to think about these reserves as part of the poolrsquos layered financial risk

management strategy is that they could be used to finance expected pool outlays every year across all

participating countries and those events with medium levels of severity that are more infrequent eg

including a large payouts for a single member or mid-level losses to a group of countries

Layer 3 Risk Pool Contingent Financing (ARC Risk Transfer) ndash The ARC risk pool would transfer risk that

it believes it would be inefficient to hold as reserves within the pool to international financial entities

which are interested in holding this risk such as reinsurance companies through instruments such as

insurance derivatives and catastrophe bonds These instruments would provide the pool with a

market-based source of contingent funds Contingent lending could also play this role Initial capital

andor replenishment capital after larger payout events could be borrowed on pre-agreed terms from

International Financial Institutions (IFIs) and repaid over a long period of time (ie 25-30 years)

(5) This same benchmark was used by the Caribbean Catastrophe Risk Insurance Facility (see Annex 1) in its initial dynamical financial analysis


b) Risk Assessment and Quantification

To enable discussions about country participation in a risk pool and therefore to enable the financial strategy outlined above ARC relies on the objective quantification of drought risk from each participating country in order to determine how to manage the risk transferred to ARC and how to make payments to member countries The AUC has worked with the World Food Programme to develop a software application called Africa RiskView that can quantify drought risk by country and region in dollar terms Africa RiskView combines models on agricultural drought in Africa with data on vulnerable populations to form a standardized approach for estimating response costs This information can help governments prepare for drought but has also been designed to be used as the basis for establishing the risk pool and allowing countries to define their participation in it (5)

ARC payouts would be based on a set of objective rules that are country specific to ensure these contributions are fair equitable and sized appropriately for the risk ARC is to cover Each country would define the severity of drought as defined by a rainfall-based formula specific to their country for which they want compensation and the amount of compensation they would need in each case To ensure that the potential liabilities of the risk pool are clearly defined going into each risk season these rules must be identified up front Participating countries premiums will be linked to these rules and the probability of the country receiving a payout in the season ahead

To be effective the rainfall-based rules must accurately reflect drought events and appropriately allocate resources to participating countries for managing their drought response costs In this way payouts from ARC would function like a parametric or index-based insurance policy where defined parameters act as a proxy for the anticipated actual response costs Parametric insurance

(5) The current Africa RiskView model performs well against WFPrsquos historical drought-related operations in Africa and forms a solid basis for further customization and refinement by countries wishing to use it to assess and potentially manage drought risk at a country level

SEVERITY

Figure 2 Simplified Graphical Illustration of a Possible ARC Risk Transfer Structure for a Single Year Highlighting a Layered Risk Management Approach


is possible when a relationship between measurable objective parameters such as rainfall can be correlated to drought-related losses In the context of ARC payouts would be optimized to address the most vulnerable through appropriate response plans

The first step towards selecting objective triggers and determining how much risk countries wish to transfer to ARC is to estimate countriesrsquo required response costs for different drought events in dollar terms Africa RiskView described in detail in the related technical note translates satellite-based rainfall information into near real-time drought response cost estimates and is a flexible tool that can be used by countries to select accurate proxies for their drought related losses and response costs needs It can also be used by countries to determine the level of risk they wish to retain and the risk they wish to transfer essentially establishing ARC payout rules for each participating country While Africa RiskView settings would be customized by each country they would be objective and transparent for all participants clearly defining parameters on which payouts would be made to each participant Countries would receive payouts based on those rules Because payouts would be based on objective parameters there would be no need to observe the actual impacts of the drought on the ground This will allow payouts to be made quickly to member countries once the event occurs ie the rains fail Since these funds will be available almost immediately after the drought occurs it will be critical for member countries to have predefined contingency plans for the use of these funds ndash plans that will be a prerequisite for participating in the pool This will allow participating governments to most efficiently allocate ARC funds and ensure that services reach those affected by drought quickly

2 Requirements for Establishment

Although the key components for feasibility exist whether a pool can be established cannot be determined a priori through a study and depends on extensive engagement with national governments and other stakeholders involved For example before an appropriate financial strategy can be defined information on the size and scope of country participation and the funds available to create initial reserves in the pool is required These two aspects are discussed below

a) Country Participation

In order to establish ARC participation guidelines will be required to reflect the technical criteria required for ARC and policy objectives of the pool Initial results indicate that at least five to six countries from distinct geographical regions would be required in order to make the risk pooling concept financially viable Because participation will be voluntary and the risk profile of participating countries will have significant influence on the operation of the pool identifying these five or six initial participating countries will be one of the first steps in establishing the entity In addition participation in the risk pool will require contributions both for initial capitalization as discussed below and ongoing participation fees Once countries indicate their initial interest further consultations will be necessary to discuss their objectives in participating In terms of policy objectives already established country-led progresses on disaster preparedness strategies and the willingness to develop of contingency plans linked to national delivery mechanisms to ensure ARC payouts translate to timely and effective assistance will also be necessary for participation Box 1 below outlines in simple terms the activities ARC participation would require from a country and its partners


Box 1 Country ARC Participation Activities For countries working towards ARC participation a dedicated in-country ARC team will assist countries in 1 Using Africa RiskView to research the level of risk that a country wishes to transfer 2 Identifying contingency plans for those funds should they become available 3 Working to determine appropriate participation fees for that transfer and how to

budget and pay for them 4 Monitoring the performance of the season by using Africa RiskView to track the

parameters that determine payout 5 Utilizing resources from ARC to implement individual contingency plans should an

extreme drought occur and a payout triggered 6 Repeating the process above for the next risk season

These working groups will be focal points for ARC coordination and training for host countries tasked with moving from stakeholder buy-in to full participation Where inter-ministerialpartner structures already exist such as CAADP Partnership Platforms ISDRrsquos DRR National Platforms or other national platforms and groups in-country groups could use and align with these platforms This engagement with countries will feed into the work required for ARC to be established and operational for a first phase including

Developing an Operations Manual for the risk pool to enable the establishment of a legal ARC

entity in an appropriate jurisdiction and defining its operating procedures accordingly

Establishment of an ARC Management Team headed by a Managing Director to execute the

functions outlined in the Operations Manual and ARCrsquos financial and operational strategy

Securing initial capitalization support from donors and IFIs (see below)

Performing the final analysis to identifying the optimal solvent and sustainable financial risk

management strategy for ARC (6) and therefore establishing the actual participation fees levels

for countries

Developing an approval process for contingency plans that respects the potential

heterogeneity of response plans at the country level while establishing ARC-wide standards

and guidelines

Defining monitoring procedures for ARC disbursements and the monitoring and evaluation

criteria for ARC and its impact on the most vulnerable and food insecure

b) Initial Capitalization

As discussed above the combined contributions of the African countries in addition to donor contributions would create reserves from which ARC would compensate member countries for drought-related costs and provide funds to replenish ARC after payments are made Initial (6) Until the ARC has firm commitments from Member States and donors we will not have real numbers at hand and will therefore in the ARC feasibility design study for example be conducting simulations that will only act as a guide in determining premium levels


KEY MESSAGES ARC provides immediate short term liquidity to participating governments after a

drought has occurred ARC would provide economic gains from early assistance to avoid adverse coping

mechanisms of vulnerable populations ARCrsquos regionally diverse risk pool would make funds available at a reduced cost ARC acts as an African contingency funding mechanism for extreme weather emergencies To be effective ARC needs to be linked to defined contingency plans within a national

risk management framework

capitalization from donors is critical as these funds would form the initial reserves in the pool as new reserved are built by country contributions over time Many donors have signaled their interest in supporting initial risk pool capitalization The ARC Project Team is assisting the African Union in raising at least US$300 million for initial capitalization

Annex 1 Relevant Experience from Africa

A notable example of using contingency financing to respond to food security shocks in Africa comes from Ethiopia Ethiopia pioneered the use of a drought weather derivative as a form of risk financing to support timely and effective emergency responses in 2006 with the support of WFP and began work on developing a broader drought risk management framework in the context of the Productive Safety Net Programme (PSNP) in 2007 to complement the future use of risk financing instruments to manage catastrophic risk (7) Although the PSNP offers a vehicle for delivering timely livelihood protection to the chronically food-insecure the transiently food-insecure remain subject to the vagaries of the emergency relief system However early and predictable assistance focused on the special needs of these householdsmdashpreventing household asset depletion as well as increased levels of destitution in this segment of the populationmdashis central to the overall sustainability of PSNP (8) Therefore the second phase of the PSNP (2010-2014) introduced a drought risk financing component to the program This approach proposes to facilitate predictable disbursement of resources for non-chronic ie emergency situations in effect allowing the immediate scale-up of PSNP activities in response to localized intermediate or severe drought events The concept is to coordinate a pool of contingent resources ndash including eventually index-based risk transfer products as piloted in 2006 ndash that can be readily and appropriately allocated in the event that many more households become food-insecure or existing beneficiaries require additional months of assistance following weather shocks ARC (7) Hess U W Wiseman and T Robertson ldquoEthiopia Integrated Risk Financing to Protect Livelihoods and Foster Developmentrdquo Discussion Paper November 2006 (8) Hess U and S Y Im ldquoSaving Livelihoods Through Weather Risk Management The Role Of Insurance And Financial Markets ndash A Case Study of Ethiopiardquo Afro-Asian Journal of Rural Development 40 (1) 21-30 2007


once established could allow Ethiopia to efficiently supplement this national contingency reserve and leverage its existing risk financing budget Approximately US$160million has been secured in contingent financing to support this new element of the PSNP from the World Bank DFID and other partners The risk financing component went live in 2011 and coincided with the Horn of African drought that severely impacted the south of the country testing the risk financing mechanism and disbursement criteria in its first year In order for a region to be eligible for risk financing each woreda (fourth-level administrative unit) within a region must have received training on risk financing and have developed contingency plans to scale up PSNPresponse activities The criteria for disbursement are not parametric but do include drought and deficit or adverse rainfall evidence within LEAP Ethiopiarsquos drought risk modelling software (9) as well as evidence of an impending crisis from other food security and early warning indicators As a result the triggering of resources is not automatic in the event of a disaster however a process for government requesting funds from the mechanism has been established and was tested this year Given the similarities of the initiatives the Ethiopia example serves as an important case study for ARC and offers important lessons for consideration in the design phase In 2008 the World Bank Treasury expanded its product line to include sovereign-level weather derivative products for client countries and for the first time offered derivative solutions for countries that qualify for International Development Assistance (IDA) loans Malawi was the first client for this new service In 2008 the Bank intermediated a transaction between Swiss Re and the Government of Malawi for up to US$5 million in catastrophic drought risk coverage that could be used to manage the import of maize in the case of a national drought-related shortfall in production (10) Similar transactions were repeated in 2009 and 2010 and a fourth is planned for 2011 To date no payouts have occurred from these transactions to test the planned use of these funds to manage the price of maize imports

Annex 2 Caribbean Catastrophe Risk Insurance Facility (CCRIF)

Hurricane and earthquakes can cause substantial financial losses to the island nations of the Caribbean Following the devastation of Hurricane Ivan in Grenada Jamaica and the Cayman Islands the Caribbean Community and Common Market (CARICOM) Heads of Government requested World Bank assistance in establishing a regional government insurance programme in order to respond in a more timely and efficient manner to hurricanes and earthquakes In 2007 the creation of the Caribbean Catastrophe Risk Insurance Facility (CCRIF) established a Caribbean-owned regional institution to do just that CCRIF provides member governments with immediate liquidity after a hurricane or earthquake It is the first regional disaster insurance facility in the world and highlights many of the steps needed to establish ARC In contrast however as it is designed to support governments in providing enhanced assistance to vulnerable food insecure populations ARC would need to be modified to take into account the linkage of payouts to contingency plans and national delivery mechanisms to ensure timely funds are translated into effective assistance to those that need it most

CCRIF is based on the idea of parametric insurance which makes payments that are objective timely and transparent Like ARC potentially could for its member governments CCRIF uses objective triggers to determine payments for catastrophic events In the case of the CCRIF payments are based on the intensity of earthquakes and hurricanes rather than an assessment of damage incurred

(9) Developed by WFP and the World Bank with the Government of Ethiopia and a prototype of Africa RiskView (10) Syroka J and A Nucifora 2010 ldquoNational Drought Insurance for Malawirdquo World Bank Policy Research Working Paper No 5169 The World Bank Washington DC


This allows quick payments to countries in order to fill the liquidity gap that arises immediately after hurricanes and earthquakes before reconstruction and development funds are available This allows governments to more efficiently cope with the impacts of the event and continue functioning A similar liquidity gap which could potentially be addressed by ARC arises after a drought as government works with donors to raise money to fill emergency appeals

The concept for African Risk Capacity (ARC) is roughly based on the CCRIF Modified for the particularities of African multi-seasonal weather risk in its financial design and based on Africa RiskView the poolrsquos governance structure could mirror the CCRIF as an African-owned AU-led stand-alone entity However the purpose of the two entities is very different The CCRIF was created to provide contingent funds to governments in the case of a hurricane or earthquake thereby allowing public facilities to continue to function Payments from the pool go directly in to the General Fund account of the affected countries and is not tracked or monitored thereafter Payouts from the ARC while based on a parametric model like the CCRIF are meant to finance early and timely responses to food insecure populations affected by extreme weather events In order to retain the integrity of the pool participating member states will need to develop contingency plans in the event of a payout and the ARC governing body will need to develop a process for ensuring that monies in the pool are protected and spent in a way that optimizes the cost efficiency and therefore reach of funds to address the pressing issues facing the most vulnerable populations ARC would be one of many tools available to governments for risk management and early preparedness and until the pool can grow over time WFPs services will still play a critical role in Africas food security architecture

One of the first steps in the development of CCRIF was identifying a template for its structure In addition there are a number of other steps that were carried out before CCRIF was established that would need to be carried out in order to set up ARC including

The design of a suitable ownership and governance approach

Putting together a set of service providers to manage the day-to-day operations of the facility

Raising funds with which to capitalize the facility

Securing support from the international reinsurance markets and

Persuading a critical mass of Caribbean governments to purchase policies

Initial capitalization of CCRIF was carried out jointly by donors and participating countries In addition to capitalization of the pool itself ongoing participation fees are required from member countries In order to participate in the CCRIF countries must contribute a membership fee proportionate to the risk being transferred to CCRIF For CCRIF participating countries determine the level of coverage at which they wish to participate based on their exposure to risk and risk transfer appetite For the first three years of its existence (through 2010) those countries that qualified for International Development Assistance (IDA) were granted the ability to apply a portion of these funds towards the entry fee and subsequent contributions to the CCRIF The CCRIF is backed by donor funds held within a World Bank Multi-Donor Trust Fund (11) combined with the financial capacity from the international markets In the first year of operation 20078 US$ 110 million of risk capacity was secured from the reinsurance markets in addition to country contributions to cover risk retained by the pool To date this arrangement has aligned the CCRIF to (11) Holding an initial US$ 50 million capitalization by donors to support claims-paying capacity and operational costs of the CCRIF while the pool build its own reserves Source Young S and Pearson M (2008) ldquoThe Caribbean catastrophe Risk Insurance Facility as a Technical Modelrdquo Natural Catastrophe Risk Insurance Mechanisms for Asia and the Pacific Conference 4ndash5 November 2008 Tokyo Japan


exceed market requirements such as the Solvency II regime

(12) allowing the facility to respond to events that may occur only once every 1000 years or more

In terms of the operational structure CCRIF was set up as a for profit ldquocaptiverdquo insurance company in the offshore jurisdiction of the Cayman Islands While CCRIF is for profit it is 100 owned by a trust benefiting member governments CCRIF has a board of directors made up of representatives from CARICOM the Caribbean Development Bank a finance expert an insurancereinsurance expert and an executive chairperson appointed by the other four board members This board of directors sets and approves CCRIF policy develops and implements strategic plans and carries out strategic planning for the organization while working to maintain its solvency In addition to the Board of Directors there are a number of additional key roles in operating the pool

Facility Supervisor Responsible for all technical operations including modeling risk transfer

pricing dynamic financial analysis claims and marketing

Captive Manager Responsible for all back-office operations including corporate secretary

accounting audit management and regulatory liaison

Asset Manager Responsible for investing CCRIF capital in accordance to the CCRIF

investment guidelines

Reinsurance Broker Responsible for implementing the risk transfer strategy developed by

the Facility Supervisor

-African Disaster Risk Pool

Figure A Liquidity Gap Following a Catastrophe Event (13)

CCRIF has been active since 2007 and between 2007 and 2010 has paid US$ 20 million in payouts to six different countries (14)

(12) Solvency II is the updated set of regulatory requirements for insurance firms that operate in the European Union specifically requirements on capital adequacy and risk management with the aim of increasing protection for policyholders It is scheduled to come into effect on 12 November 2012 httpwwwfsagovukPagesAboutWhatInternationalsolvencybackgroundindexshtml (13) Source Young Simon ldquoClimate Risk Management and Risk Transfer Utilising insurance industry tools to underpin cost-effective adaptationrdquo presented at the Seventh African Development Forum 10-15 October 2010 Addis Ababa Ethiopia (14) wwwccriforg


Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric

The establishment of a reserve fund for the purpose of offsetting unexpected financial claims or costs Sometimes referred to as self-insurance these reserves are often used to finance frequent and not severe losses or in the case of ARC country drought response costs The aggregation of individual risks to manage the consequences of independent risks Risk pooling is based on the law of large numbers In insurance terms the law of large numbers demonstrates that pooling large numbers of roughly homogenous independent exposure units can yield a mean average consistent with actual outcomes with a smaller standard deviation Thus pooling risks allows an accurate prediction of future losses and helps determine insurance premium rates or in the case of ARC annual participation fees Takes a defined risk and passes it from one party who does not wish to have this risk (the insured) to a party who is willing to take on the risk (the insurer) for a fee or premium Funds secured ex-ante ndash that is before hand ndash to be triggered and released by an event These contingent funds can come in the form of reserves financing instruments such as loans or grants or risk financing instruments such as insurance reinsurance derivatives or CAT bonds Parametric insurance-like instruments make payments based not on an assessment of the individual loss but rather on measures of a parametric index that is assumed to proxy actual losses Basing payouts on such an objective index allows for timely payments without relying on potentially lengthy and subjective loss assessments or evidence of incurred costs Parametric approaches can be used with all risk transfer instruments and contingency financing approaches

In 2007 CCRIF paid out almost US$ 1 million to the Dominican and St Lucian governments after the 29 November earthquake in the eastern Caribbean and in 2008 CCRIF paid out approximately US$63 million to the Turks amp Caicos Islands after Hurricane Ike made a direct hit on Grand Turk In 2010 its fourth year in operations it issued 29 annual policies to 16 CARICOM countries One of the biggest tests of CCRIFrsquos functionality came on January 12 2010 when a magnitude 70 earthquake struck outside Port-au-Prince Haiti Less than 24 hours after the earthquake occurred CCRIF determined that the full payout (US$ 7753579 USD) based on its catastrophe insurance policy for earthquakes for the 200910 policy year was due to Haiti and the funds were transferred to the Haitian Government following the required 14-day waiting period for calculation verification This value represents approximately 20 times the premium of US$ 385500 The payout determination was made based on the strength and location of the earthquake as outlined in Haitirsquos policy Following the passage of Tropical Cyclone Tomas on 30-31 October 2010 three countries received a CCRIF insurance payout Barbados US$ 8560247 Saint Lucia US$ 3241613 and St Vincent amp the Grenadines US$ 1090388

While focusing on hurricane and earthquake rather this pool provides a concrete example of how a regional risk pool can be established and implemented It also provides valuable insight into the steps required to establish a similar entity for drought in Africa

Annex 3 Technical Terms

Fig1 ARV Main Interface

African Risk Capacity - ARC

Sovereign Disaster Risk Solutions A Project of the African Union

AFRICA RISKVIEW TECHNICAL BULLETIN

Introduction

The Commission of the African Unionrsquos Department of Rural Economy and Agriculture with technical assistance from the UN World Food Programme (WFP) has initiated the African Risk Capacity (ARC) Project ARC is envisaged as an African-owned standalone financial entity that will provide African governments with timely reliable and cost-effective contingency funding in the event of a severe drought by pooling risk across the continent

ARC could eliminate delays responding to disasters due to a lack of funding and prevent disruptions to other critical country programmes due to reallocation of limited budget resources ARC would seek to only partially fund the disaster needs of countries and each participating country in advance of joining ARC would create a contingency plan identifying how ARC funds would be optimized to assist those affected

The objective of this brief is to provide more detail on Africa RiskView (ARV) the technical engine for ARC ARV is a software application developed by the UN World Food Programme (WFP) that provides a transparent system to estimate crop losses and the impact on populationsrsquo food security from future droughts for Sub-Saharan African countries It then translates that impact into equivalent financial terms to provide an estimate of the total response costs required to assist those populations that are potentially affected

In this way ARV provides member governments with a tool that can be used to estimate their financial drought risk and therefore to determine the appropriate amount of risk to transfer to the ARC risk pool

This brief should be considered a follow-on document to more general briefing documents on ARC1 and

will focus on the key components of ARV ndash estimating losses in staple crop production due to rainfall deficit identifying the population affected estimating the cost of the event and determining parameters for risk transfer to ARC This brief is divided into five basic sections

Technical Overview ndash Describes how ARV has been designed and the key components of ARV

Operational Applications ndash Identifies the tools available to member countries through ARV and how

these tools can be used as part of ARC

Case Study on Country X ndash Provides an example of how a country would apply ARV

Key Terms and Messages ndash Summarizes the key terms used throughout the document and the

critical messages discussed

Frequently Asked Questions ndash Provides a few of the most commonly asked questions about

ARV and how it could benefit African Union Member States

At the end of this brief readers should have a good understanding of the purpose of ARV and how it functions They should also have a better understanding of the core components of Africa RiskView the platform and the underlying methodology Finally the brief will summarize how member governments can use ARV to estimate the risk they wish to transfer to the ARC and monitor how the rainfall season is developing and whether a payout from ARC is due

1 Background documents on ARC are available to provide a fuller picture of the rational background and components of ARC This document

provides detail on ARCrsquos technical engine Africa RiskView

AFRICAN UNION

Technical Overview

Africa RiskView combines a number of different disciplines including crop monitoring and early warning vulnerability assessment and mapping financial planning and risk management into one software tool that provides a standardized approach for estimating drought response costs systematically across a large number of African countries ARV uses data from leading operational sources (eg FAO FEWSNET NOAA WFP) for 32 countries to estimate high-level food security needs and response costs It has been built in an additive structure with each component building on the previous step ARVrsquos capabilities can be divided into four components which will eventually lead countries to determine their risk and the level of risk they wish to transfer to ARC given their risk management strategy The first three of these components are discussed in the technical overview section while the fourth will be discussed in the operational overview

1 Rainfall and crop monitoring 2 Populations affected 3 Estimated response costs 4 Determine risk management needs

Component 1 Rainfall and crop monitoring In order to determine the potential impact of rainfall on a crop in a given year it is critical to understand how weather will affect food crops and pasture for livestock grazing Measuring total rainfall at the end of a season has proven to be too crude of an indicator for estimating the potential impact of rainfall deficits on production and therefore on livelihoods So instead of relying on seasonal estimates ARV allows users to view calculate and download historical and current Water Requirements Satisfaction Index (WRSI) values The WRSI is a simple water balance model developed by the Food and Agriculture Organization (FAO) which compares the amount of water available throughout the season to how much a plant needs in its different stages of growth This model is transparent and has shown to more accurately reflect growth patterns

The WRSI has proven to be a meaningful indicator of how the shortage of rainfall may impact yields and the availability of pasture by monitoring water deficits throughout the growing season capturing the impact of timing quantity and distribution of rainfall African countries have already been applying WRSI in a variety of contexts and WRSI models currently serve as the foundation for most early warning methodologies as well as the basis for analysis of many international expert organizations like FEWS-NET the Joint Research Centre of the European Commission (JRC) and FAO

One of the advantages of the use of WRSI in ARV is that it allows member countries to enter crop parameters and through the generation of the WRSI to build a basic picture of how a crop or crops would perform in a country under different rainfall conditions By varying the type of rainfall season in the WRSI model ARV can estimate how changes in rainfall will affect yield outcomes for a given country region or district

Output Estimate of seasonal performance at the district regional and national level

under different rainfall conditions

Water Deficit

Water Requirement Satisfaction Index

Water Excess

Fig2 East Africa 2nd

Season ndashFinal Index WRSI 2009 for maize (right) amp ldquoCompare to Normalrdquo image (left)

Fig3 In-season response costs estimates

Component 2 Population Affected While an index indicating the performance of a crop is useful to determine how the crop fared in a given season the second component of ARV indicates how drought has impacted the needs of households vulnerable to food insecurity Since individuals and households are able to cope with droughts with varying levels of success ARV estimates the population affected by overlaying drought index information with sub-national data about the percentage of population vulnerable in case of drought occurrence The latter is generated based on two variables a) exposure and b) resiliency Exposure to drought risk is defined by the weight of agricultural activities (in terms of production casual labour and livestock) in the householdrsquos total annual income Resiliency is measured in terms of householdrsquos distance from the poverty line In this way ARV estimates the direct impact of drought on vulnerable households The percentages of the population vulnerable to mild medium and sever drought can be changed by the user at different administrative levels

Once this process is complete ARV users can see not only how different rainfall seasons will affect yield outcomes but will also have a picture of how these losses will impact populations with different levels of vulnerability to drought While there are different approaches that could be used to determine this vulnerability estimate using ARVrsquos exposure and resiliency approach the correlation between the estimated number of people potentially affected by drought through ARV and historical operational response data is approximately 90 for all drought-related WFP operations from 2000-2010 in sub-Saharan Africa with scope for further improvement at the individual country level as the model is refined

Output Population affected estimates for current and historical rainfall seasons weighted to account for differing exposures and resiliency to drought risk

Component 3 Response Costs The first components of ARV provide an index-based estimate of seasonal performance and the impact of that performance on populations in the affected areas However to make this number useful for policymakers in finance and disaster planning and preparedness it is necessary to use the populations affected estimates to determine a monetary approximation of response costs

Africa RiskView estimates the expected and potential (variable) response costs at the continental (sub-Saharan Africa only) regional country and first administrative levels by multiplying the population affected by a cost per beneficiary number The cost per beneficiary can be adjusted by the user to reflect the cost of various types of responses to food insecure populations (eg food aid cash vouchers social safety net scale-up) This process will provide an estimate of financial needs for drought events of varying magnitudes The tool also allows users to look back in time at past rainfall seasons and observe how they could have impacted todayrsquos populations with todayrsquos response costs Studying historical data can help with contingency planning and emergency preparedness for future shocks in the country

Output Response costs will provide a financial estimate of the resources needed to meet early emergency needs for different seasonal outcomes based on an estimated cost per beneficiary

Fig4 Annual response costs estimates (top right) graph ARC risk transfer parameters editing window (center left) In-Season response costs estimates graph (bottom right)

Operational Applications ARV is a very useful tool for analyzing and determining monetary losses from drought events of different magnitudes However ARV was designed to be the technical foundation for the ARC a risk pool that has specific operational objectives ARC is envisioned as a parametric risk pool which means it is being developed on the basis that objective triggers will be used to allocate resources to participating governments in times of drought A critical component of a parametric system is to define those rules and to determine if and when countries receive a payout at the end of a rainfall season This is where the analytical power of ARV described above can be used to both establish these rules and then monitor the season as it develops and determine if a payout is due Specifically ARC would disburse funds based on the WRSI index used in ARV Significant negative deviations in the index indicating a severe drought would result in payouts to member countries ARV is necessary to establish and manage a parametric risk pool like ARC and provide member governments the opportunity to select a transparent risk management strategy that matches their needs Therefore looking specifically at the context of ARC ARV can accomplish three things

1 Analyze the impact of rainfall on vulnerable populations in dollar terms

2 Allow member countries to determine

what level of risk they wish to retain and what level of risk they wish to pass to ARC

3 Act as a contract monitoring and

settlement tool for ARV contracts by providing ongoing estimates of potential losses as the season develops and at the end of the season as explained below

By working through all three components of ARV member governments could determine how changes in rainfall would ultimately result in changes in the WRSI index the population affected and estimate the ultimate cost of different events Quantifying risk through ARV in this way and identifying the financial losses associated with different drought events can assist governments in understanding the funds they require given their contingency plans to respond to drought events of varying magnitudes They can select the level of the index beyond which they would want coverage through ARC to support these plans and in this way countries would establish objective triggers for payouts from the risk pool if such droughts occurred Specifically governments can edit these preferences using ARVrsquos Risk Transfer Parameters function and define their desired level of participation in ARC This would include selecting the deductible (the risk the country wants to retain and manage using other resources) the limit (the maximum payout a country can receive in the case of an extreme drought) and the ceding percentage (the percentage of the total modeled risk the country wishes to transfer to the pool) to specify a countryrsquos participation The participation fee or premium a country will have to pay to transfer this risk to ARC will depend on how these parameters are selected

Finally if governments do choose to participate in ARC ARV allows governments to monitor how the WRSI is developing through the season and provides an estimate of potential payouts at each point in the season based on the risk transfer parameters selected Rainfall data in ARV is updated every ten days and with this input ARV can allow governments to see in near real-time the likelihood that there could be a payout from ARC and more generally the likelihood of a potential need for an emergency response This can lead to better planning for responses and taking steps to address a potential crisis even before it begins

Case Study

This section will present the steps that a country would need to take to use ARV as an information and decision making support tool for ARC and general emergency preparedness Imagine a sub-Saharan African country where the agricultural growing season has yet to begin The government has elected to participate in ARC but has not decided how much risk it will transfer to the ARC pool It needs to make an informed decision and select an amount for risk transfer that accurately represents its risk profile and the potential losses for the country and its risk management strategy To do that the member government decides to access ARV to try and determine the appropriate level of risk transfer

Step 1

To use ARV the country will be given a unique UserID and Login to access the software tool Once logged on the country should start by looking at the potential seasonal outcomes due to variations in rainfall They can do this by adjusting the seasonal WRSI model to better reflect conditions in their country (or use the default parameters for their country) to see estimated yield outcomes in average rainfall years The country experts could then compare this to WRSI in years when there were significant droughts or other events This would provide information on the frequency and magnitude of these extreme droughts on different regions

Step 2

Next the government could use these WRSI estimates to see the impact of these droughts on populations in different areas By incorporating data to indicate the exposure and resilience of different populations within in a country (along with basic population data) ARV can provide estimates on the number of people that would be affected by droughts of different magnitudes The default data in ARV derived from household surveys by WFP can be used or users can edit this data if they have better information on vulnerable households available

Step 3

After the WRSI numbers for any given year are combined with the vulnerability data to estimate the population affected ARV can estimate the response cost for different events by multiplying the population affected by an estimated cost per beneficiary Because cost per beneficiary can be edited in ARV it is possible for the government to change these costs as needed to ensure that the estimates accurately reflect needs by population group and type of planned response to assist them

Step 4

Finally the government can then use this information to determine their desired risk transfer parameters By looking at the financial impacts of events of different magnitudes the government can select the deductible limit and percentage of risk they wish to transfer to ARC The government will have its own preferences depending on its national risk management strategy and other available resources and ARV allows it to edit its preferences in order to select a risk management strategy that best suits its needs and risk retention preferences

Step 5

As the season progresses the government can login to ARV to see how the season is progressing Since rainfall is recorded in ARV every ten days governments can anticipate the outcome of crop season before it is completed They can see how the current weather conditions and seasonal forecasts are affecting the WRSI and therefore see if it is likely or unlikely that an emergency response will be needed at each point in the season In addition this will allow the government to see if the risk transfer parameters selected would result in a payout as the season develops This will allow for response planning even before the harvest comes in allowing governments to make sure the appropriate responses are in place and that contingency plans are ready to be activated

MESSAGES ARV was designed based on the Water Requirements Satisfaction Index (WRSI) which is a

crop model that can be used to isolate the effects of deficit and excess rainfall on crop yields

ARV is the technical engine for ARC and provides the analysis to determine when and in what amount payouts from ARC are due to a participating country

ARV was designed to be highly transparent and the different parameters in ARV can be

changed and customized based on country regional and local conditions ARV will be an essential tool in determining the rainfall-based rules for payouts to

participating countries (which will be done on a country-by-country basis) as well as risk transfer of the risk pool to the international risk markets

ARV can allow countries to monitor how the season is developing as the season progresses

since it is updated with rainfall data every ten days which then indicates the probability of different seasonal outcomes

TERMS WRSI

Deductible

Ceding Percentage

Limit

WRSI stands for Water Requirement Satisfaction Index It is a simple crop model which isolates the impact of water (moisture) stress on yields The model is used to index crop yield to water provision and therefore determine the relationship between crop production and rainfall variability assuming other factors affecting production are held constant

In insurance terms it is the amount of money that the policy holder must pay themselves to cover losses before receiving a payout from an insurer In the context of ARC it is the risk a country retains before a payout is triggered from ARC Generally speaking the higher the deductible the lower the cost of the premium (ARC participation fee) and the lower the deductible the higher the cost of the premium It can also be thought of as the drought severity level beyond which ARC starts disbursing funds with high frequency low severity drought retained by the country and managed using other resources The percentage of total modelled drought risk that a country wishes to pass on to ARC For example if ARV estimates a worst case drought scenario in a country may cost $US50 million and a country chooses a 50 ceding percentage it will receive US$25 million if that worst case drought scenario comes to pass Refers to the point in a risk transfer contract beyond which no further compensation will be received ie it is the maximum possible payout that contract will permit In the context of ARC it is related to a level of drought beyond which further payouts stop For example if ARV estimates a US$30 million drought response cost but a country has selected a US$25million limit then it will only receive US$25 million from ARC

Key Terms and Messages

Frequently Asked Questions

Who owns ARV ARV is owned managed and maintained by WFP The software program was designed by the WFP on behalf of the African Union for the purpose of supporting ARC and will be used by ARC its participating countries and their partners under a software license agreement at no cost to the countries or the African Union Commission The rainfall data that is used to run ARV is accessed from a third party (the US National Oceanic and Atmospheric Administration NOAA) for free every ten days and entered into ARV automatically via the internet

Can anybody use ARV No ARV was designed for use by African governments and their partners who are participating in or are working towards participation in ARC Users will sign a license agreement with WFP before using the tool Because of the benefits that ARV could have to other parties such as NGOrsquos and those working in food security and agriculture in developing countries the legal team is working to make it available in the future to additional users as a separate product

What are the biggest benefits of ARV Beyond providing the technical infrastructure for the ARC risk pool ARV allows governments to quantify the potential financial costs associated with different rainfall seasons ARV provides governments with information about the magnitude of potential losses and allows them to begin planning for potential responses due to drought events and to refine their national risk management strategy

How can ARV help me determine how the rainfall season is developing Because the rainfall data in ARV is updated every ten days it is possible to determine as the season is progressing the potential outcomes due to deficit rainfall While it cannot forecast the outcome for the season with complete certainty until the season ends ARV can give the probability of different outcomes for the season as rainfall information becomes available To do this ARV uses historical rainfall data and also incorporates seasonal forecasts for the months ahead to develop a probable distribution of how the rest of the season could evolve For instance after the first two months of a rainfall season ARV will likely be able to identify if the crops in a given area had sufficient rainfall to germinate This would then allow ARV to narrow the number of potential outcomes for the season by ruling out a season where the crops did not germinate and then focusing on the seasonal performance for the remainder of the season in the remaining areas What special training is needed to utilize ARV There is no special training needed to use ARV ARV is designed to be a user-friendly software that can be used on a desktop or laptop It is beneficial to have a good understanding of a number of different subject areas to fully take advantage of all ARV has to offer including crop modeling agronomy statistics and insurance There is an online version for decision makers and a desktop version for more advanced users who may want to edit ARV settings and perform deeper analyses For some government staff it will be beneficial to participate in a training program in order to see all the key features of ARV and how to best utilize all of the different layers of analysis built into ARV

Why canrsquot I use the other loss estimates to determine payouts from ARC The concept behind ARC is that it can used to facilitate payouts to clients based on objective rules These rules then signal when a payout from ARC is due or is not due and the magnitude of that payout The system for paying out therefore needs to be an objective standardized and transparent quantification of risk While there are many ways to quantify the risk associated with drought for governments in order for ARC to function as a risk pool and for this risk to potentially be transferred to the international market it is important that this risk is quantified in a similar way across countries ARV provides that platform by utilizing the same methodology across countries in order to provide an estimate of potential losses Countries will be able to review and customize model settings before joining the pool

AFRICAN UNION

African Risk Capacity Regional Brief East Africa


Overall Regional Performance

ARV has shown that the bordering pastoral areas of northern Kenya south-eastern Ethiopia and southern Somalia have been affected by severe drought for more than a year For these pastoral areas particularly in Somalia the September 2010 to January 2011 minor rains failed or were significantly below average The in-season tracking functionality of ARV showed this rainfall deficit in November 2010 and even with improved rains it was too late for the rangeland pasture to recover in some areas The major rains from March until June 2011 were also below average It is these consecutive poor seasons that have led to the current humanitarian crisis

The images below from ARV show the level of cumulative rainfall in the region from June 2010 to May 2011 ndash an appropriate rainfall accumulation period for the rangeland areas As can be seen for this border region this period has been one of the driest in the softwarersquos 15 years of available data Southern Somalia has been hardest hit with little rainfall received in the area since May 2010 and ARV has shown this period to be the driest in the 15 years of available data for Somalia Other regional prolonged rangeland droughts can be seen in the images for 19961997 and 19992000 with more localized agro meteorological droughts occurring in other years

Introduction

This regional brief provides an overview of how Africa RiskView (ARV) can be used to analyse the potential impacts of an adverse rainfall season on crop production and rangeland in East Africa including the Horn countries In addition the brief highlights the role the African Risk Capacity (ARC) risk pool could play in insuring against these risks The brief begins by discussing the seasonal performance in the region and then looks specifically at the three areas described below to demonstrate the potential role of ARC for Kenya and Ethiopia

Seasonal Performance ndash ARV uses FAOrsquos Water Requirements Satisfaction Index (WRSI) to determine if the rainfall received during a season arrives during the key growth periods of the crop and in sufficient amounts It can also be used to monitor the status of rangeland for grazing ARV then compares the outcome of the current season to the WRSI in a ldquonormalrdquo year

Vulnerability and Populations Affected ndash ARV determines populations affected across different rainfall seasons by dividing households into groups based on their level of exposure to drought and resiliency to shocks For those seasons where performance is poor the total number of people affected will be defined based on these indicators In addition to risk transfer the output of this analysis can be used for early warning

Risk Transfer ndash Since the goal of ARC is to transfer the risk associated with drought events of different magnitudes away from the country and to the pool this section provides an example of the type of coverage that could have been secured had the risk associated with this seasonrsquos rainfall been transferred to ARC

AFRICAN UNION


Seasonal Performance ndash Kenya

Kenya has two rainfall seasons which affect the pastoral north of the country which borders Ethiopia and Somalia and has two additional rainfall seasons in its agricultural areas For the pastoral areas based on ARVrsquos analysis the 201011 short rains (August ndash January) failed last year and the 2011 long rains (February ndash July) have been below average Based on ARVrsquos analysis the short rains in the agricultural area were also below average for the marginal districts in the north bordering the pastoral areas This year in the core agricultural areas Kenyarsquos long rains have been average

Vulnerability and Populations Affected ndash Kenya

According to ARV which looks at the vulnerability and resiliency of different populations to drought the poor 201011 short rains in both the agricultural and pastoral areas impacted 22 million people with the pastoral populations affected again by the failed long pastoral rains in 2011

LONG RAINS ndash PASTORAL 2011SHORT RAINS - PASTORAL 201011 SHORT RAINS - AGRI 201011

Risk Transfer ndash Kenya

In order to illustrate the role that ARC could play in providing risk coverage for these poor seasons it is possible to simulate what would have occurred if part of this risk had been transferred to ARC To do this hypothetical risk transfer parameters have been selected These include a payout that would provide $50 dollars per person affected to support response costs and a transaction that would cover drought events that occur with a payout frequency of once every five years on average in both rangeland rainfall seasons A maximum payout of $100 million per season was also chosen

If this risk had been transferred to ARC using these parameters Kenya would have received a payout from the pool for the two poor rainfall seasons in the pastoral areas The first payout would have been received in the first week of February 2011 to respond to affected populations following the failed short rains with another small payout at the end of July as a result of the poor long rains Using the in-season tracking functionality of ARV the poor performance of the short rains was visible from November 2010 Since there is some flexibility in defining the length of the pastoral rainfall seasons it would have been possible to set the risk transfer parameters so that a payout would have been received even earlier in the season The tables below (from left) show the cost of transferring this risk to ARC as a percentage of the maximum possible payout the total modeled response costs for both pastoral seasons had todayrsquos population experienced that same past rainfall and the potential payouts from ARC for these years based on the parameters selected

Premium Table ( of max payout) Total Modeled Response Costs Estimated Historical Payouts

Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4

Note Savings are based on estimates from a 13-country pool assuming all countries have elected the same payout frequency

HIGHLIGHTS

Estimating the impact of observed weather data on vulnerable populations requires an understanding of how weather

spatial extent of weather shocks into number of people affected and the appropriate response

The Africa RiskView results here for Kenya focus exclusively on drought risk during the long and short rains from April to October and from September onwards respectively and for the two rangeland seasons The model is designed to capture the number of people directly affected by drought in these areas by looking at their exposure to drought and at their capacity to cope today with drought events of different magnitudes that happened in the past It does not currently consider the indirect impacts of drought on those not actively employed in agriculture andor livestock breeding

The model shows that there have been significant drought events in these areas since 1996 in particular the drought of 20056 had a devastating impact where WFP responded to 36 million beneficiaries who were among the people in need of some kind of assistance (see figure below) livelihood activities and poverty the model predicts that a drought like the one experienced in 20056 which affected both the crop and rangeland areas of the country would affect over 7 million people through some sort of livelihood stress further refinement of the model is needed to give estimates for the number of those affected that would need food assistance

Although the 2010 long rains were good the later short rain seasons have been below average particularly in the

current model estimating nearly 23 million people could be affected Other sources (such as FEWSNET and Arid Lands Resource Management Project) have confirmed that there is trouble in the region for the 2010-2011 short rain seasons with assessments estimating numbers of drought affected people of the same order of magnitude

Country Brief Kenya Africa RiskView Climate and Disaster Risk Solutions April 2011

1

Country Brief Kenya

Africa RiskView Climate and Disaster Risk Solutions April 2011

1 The graphs show the responses costs during the East Africa 2nd Rangeland Season EAR2 (August - January) and the East Africa 3

rd Season EA3 estimated during the course of the season The grey lines

show the cone of uncertainty around the remainder of the season (green area) as it shrinks towards the end of the season giving the final number of population affected and therefore cost estimate EA2 = East Africa 2nd Season (April October) EA3 = East Africa 3rd Season (September April) EAR1 = East Africa 1st Rangeland Season (February July) EAR2 = East Africa 2nd Rangeland Season (August- January)

Modelled Impact (Population Affected EA2+EAR1)


AFRICAN UNION


Seasonal Performance ndash Ethiopia

Similar to Kenya Ethiopia also has four distinct rainfall seasons In the pastoral areas which are located in the southeast of the country bordering Kenya and Somalia there are two rainfall seasons ndash the minor deyr rains that occur between August and January and the major gu rains which occur between February and July It is these pastoral areas that are currently being affected by drought ARV has shown that last yearrsquos deyr rains were poor and this yearrsquos gu rains have also been below average There are also two agricultural rainfall seasons ndash the belg short rains (Feb-July) and the meher long rains (April-October) The belg season was below average in the southern agricultural areas that border the pastoral region To date the current meher season in the main agricultural areas have been good

Vulnerability and Populations Affected ndash Ethiopia

According to ARV which assesses the impact of drought by looking at the vulnerability and resiliency of different populations the poor 201011 deyr rains impacted 14 million people with an additional 43 million affected due to the poor 2011 gu and belg rains in the south

GU 2011 BELG 2011 DEYR 201011

Risk Transfer ndash Ethiopia

To demonstrate how ARC could have provided risk coverage for the pastoral areas the same hypothetical parameters as for the Kenyan example above were chosen Based on this risk transfer selection Ethiopia would only have received a payout from the pool immediately following the poor gu rainfall season in July As above the tables below (from left) show the cost of transferring this risk to ARC the total modeled response costs for both pastoral seasons and the potential payouts from ARC based on the parameters selected


Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4


In Ethiopia the biggest impact in the pastoral areas for the past 12 months has been the cumulative effect of two poor rainfall seasons as pastoralists can use traditional coping mechanisms to manage their herds following a single poor period The payout chart on the right for Ethiopia is only based on the impact of a single seasonrsquos rainfall transferred to ARC individually and therefore does not take into account the aggregate losses of two consecutively bad seasons Had Ethiopia chosen to transfer risk to ARC over a longer period which encompassed both poor seasons (as shown by the middle chart above) the payout could have been significantly higher although it would only have been received following the end of the gu rains in July

While this brief focuses on risk transfer it is clear that droughts in both Kenya and Ethiopia are frequent and reoccurring in the pastoral areas For these countries risk transfer could help manage only the more infrequent extreme risks For risks which are chronic and recurrent using annual budgetary allocations and other instruments such as safety net investments and strategic grain reserves will be more suitable and together with longer term investments in DRR and climate change adaptation will contribute to a more comprehensive national risk management strategy

BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer

All Africa RiskView products are a work in progress subject to change at any time and shown for illustration only and are not to be shared further WFP and contributing donors make no representation or warranty of any kind whether express implied or statutory as to the accuracy or fitness for a particular purpose of the products and information contained within Africa RiskView or this brief In no event shall WFP nor contributing donors be liable with respect to any subject matter presented here


SECTION 3 Diplomatic Notes and Policy Decisions

7 Note Verbale on the ARC to All Member States of the African Union

8 Aide Memoire on the ARC

9 Decisions taken on the ARC by African Ministerials and Policy Organs of the African Union

a Third Joint AU Conference of African Ministers of Economy and Finance Planning and Economic

Development and ECA Conference of African Ministers of Finance Planning and Economic Development held in Lilongwe Malawi on 30 March 2010 (Resolution L-7 and EXCL586(XVII)) ndash endorsed at AU Summit of African Heads of State and Government in Kampala Uganda July 2010

b Second Africa Ministerial Conference on Disaster Risk Reduction held in Nairobi Kenya on 16 April

2010 (EXCL589(XVII)) ndash endorsed at AU Summit of African Heads of State and Government in Addis Ababa Ethiopia January 2011

c Second Africa-Arab Summit held in Sirte Libyan-Arab Jamahiriya on 10 October 2010

(AssemblyAfrica-ArabRes2(II)) d Decision on Disaster Risk Reduction taken by the African Union Executive Council at the AU Summit in

Addis Ababa Ethiopia on 27 January 2011 (EXCLDec607(XVIII)) e Fourth Joint AU Conference of African Ministers of Economy and Finance Planning and Economic

Development and ECA Conference of African Ministers of Finance Planning and Economic Development held in Addis Ababa Ethiopia on 29 March 2011

AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA

Addis Ababa ETHIOPIA P O Box 3243 Telephone 011-551 7700 Fax 011-551 7844 website www africa-unionorg

African Risk Capacity A Pan African Disaster Risk Pool

Information Note

Africa Must Transition from Managing Crises to Managing Risks The increased frequency of extreme weather events driven by climate change will result in increased risk of hunger and malnutrition in Africarsquos most vulnerable populations As currently structured the system for responding to natural disasters is not as timely or equitable as it could be Funding is secured on a largely ad hoc basis after disaster strikes and only then can relief be mobilized toward the people who need it most In the meantime lives are lost assets are depleted and development gains experience significant setbacks ndash forcing more people into chronic destitution across the continent Establishing contingency funding or monies that become available automatically if an extreme drought flood or cyclone occurs in a vulnerable area ensures a more timely appropriate objective and transparent response Because extreme weather events do not happen in the same year all across the continent pan-African solidarity in the creation of a disaster risk pool could be financially effective Such a facility would provide participating Member States readily available cash in the event of a natural disaster The African Union already has a Special Emergency Assistance Fund for this purpose However it is too small to adequately cover the risks facing the continent in need of constant replenishment and therefore unsustainable Disbursements are made according to the best information available to the Member States administering the fund however decision-makers are not always presented with the most objective and comprehensive data available during an emergency The AUC with technical assistance from the UN World Food Programme has been working to improve this system by using best-of-breed technologies and innovative financing mechanisms in order to build the capacity within the continent to finance humanitarian assistance when and where we need it while reducing our heavy reliance on external aid in emergency situations Support from the Policy Organs of the African Union On 25 March 2010 the Department for Rural Economy and Agriculture convened a meeting of stakeholders in disaster risk reduction at the continental level Participants included representatives from the regional economic communities technical institutions (eg ACMAD ICPAC AMESD) as well as UN agencies and partner organizations concerned with disaster response and management This group evaluated multiple programs and referred their recommendations including one in support of a risk pool to the Second Africa Ministerial Conference on Disaster Risk Reduction (DRR) in Nairobi Kenya On 16 April 2010 Ministers passed a declaration which ldquoCalls Upon Member States to explore the feasibility of continental financial risk pooling in working towards the creation of an African-owned pan-African Disaster Risk Pool for Food

2

Securityrdquo1 The Conference of African Finance Ministers gathered on 29-30 March in Lilongwe Malawi adopted a similar endorsement in Resolution L-7 in which they resolved to ldquoSupport efforts towards enhancing national and regional capacities to mitigate exposure to disaster risk through institutionalizing effective financial and other instruments such as strategic grain reserves budgeted contingency funds as well as through sharing risk across regionsrdquo The latter was adopted by the Executive Council in its report of the Ministerial2 and subsequently approved by Heads of State at the July 2010 AU Summit in Kampala Uganda Africa RiskView Fund Management Software The first step towards establishing such a pool is quantifying the risk in dollar terms Climate and Disaster Risk Solutions funded by the Rockefeller Foundation at the UN World Food Programme (WFP) has developed a methodology using leading technologies to assess the impact of weather events on food security across Africa ndash information critical to financial preparedness for natural disasters One of the endeavourrsquos principal products is Africa RiskView a software application that translates satellite-based rainfall information into near real-time needs estimates Africa RiskView provides decision-makers with expected and probable maximum costs of weather-related responses before an agricultural season begins and as the season progresses for every first-level administrative district for every country in sub-Saharan Africa To date the software has focused on drought but other weather risks can be included in the future The software enables management of Africas weather risk as a whole in one financially optimized continent-wide risk portfolio The Africa RiskView model performs well against historical drought-related assistance in Africa with loss estimates correlating at nearly 90 to actual WFP responses over the past decade The model is flexible and can be customized and refined for each country using the best data available

Aggregating Risks Across Regions Creates Savings While each country may use this information to build a national risk profile and contingency financing strategy there is a clear financial incentive to pool different types of weather risk across countries and regions National contingency funds or national weather insurance contracts such as those pioneered by Ethiopia and Malawi can be expensive propositions for a single national government Evidence suggests that a scheme involving several governments using a single instrument pooling their risk and then approaching donors andor the market as a collective to manage this risk stands to save African governments significant amounts in risk management and emergency response costs It is unlikely that extreme weather events will happen simultaneously or in the same year in every country This diversification means risks do not accrue in an additive fashion lowering the probable maximum costs that a group of countries may incur together to a more manageable amount than the sum of each countryrsquos individual probable maximum cost Preliminary findings indicate a 50 savings from diversification of drought-related losses across Africa This means that if African countries were to pool their drought risk the poolrsquos capital requirement would be half the sum of each country creating their own reserves ndash making a Pan-African Disaster Risk Pool an attractive financing mechanism in support of African food security

1 See Report of the Expertsrsquo Meeting Preceding The Second African Ministerial Conference on Disaster Risk Reduction (DRR) which took place in Nairobi Kenya 16 April 2010 2 See Executive Council Report (EXCL596(XVII)) of the Third Joint AU Conference of African Ministers of Economy and Finance and ECA Conference of African Ministers of Finance Planning and Economic Development which took place in Lilongwe Malawi 25-30 March 2010

3

Risk Pool in Action Relevant Experience from the Caribbean Following the devastation caused by Hurricane Ivan in the Caribbean in 2004 CARICOM Heads of Government requested World Bank assistance in establishing a contingent fund in order to respond in a more timely and efficient manner to hurricanes and earthquakes This Caribbean-owned regional institution is the first regional disaster insurance facility in the world and serves as a model that could be adapted for Africarsquos more complex food security requirements The Caribbean Catastrophe Risk Insurance Facility (CCRIF) provides 16 CARICOM member governments with immediate liquidity after a disaster CCRIF uses a parametric instrument to trigger payouts which means that payment is triggered by measurements of the intensity of the event rather than an assessment of damage incurred thus ensuring quick release of funds at times when affected countries need it most CCRIF has been able to efficiently diversify its portfolio thereby reducing risk management and risk transfer costs for participants Participation in the CCRIF is voluntary and country governments determine the level of coverage at which they wish to participate based on their exposure to risk In order to subscribe to the CCRIF participating countries contribute an entry fee proportionate to their own specific risk exposure For the first three years of its existence (through 2010) those countries that qualify for International Development Assistance (IDA) have been granted the ability to apply a portion of these funds towards the entry fee and subsequent contributions to the CCRIF The facility is backed by donor funds held by the World Bank in a Multi-Donor Trust Fund combined with the financial capacity of the international markets This means that CCRIF offers a high level of resiliency by international standards A board comprised of participating country and relevant international organization representatives makes major decisions affecting the CCRIF African Risk Capacity The concept for African Risk Capacity (ARC) is roughly based on the CCRIF Modified for the particularities of African multi-seasonal weather risk in its financial design and based on Africa RiskView the poolrsquos governance structure could mirror the CCRIF as an African-owned AU-led stand-alone entity The AUC with technical assistance from WFP has undertaken a study of design options including the institutional legal and financial architecture of such an entity and participation guidelines The structure size and scope of an initial ARC entity the role of stakeholders in the pool and the requirements for participation will be determined though this design and consultation process

EXCL589(XVII) Annex 1

DECLARATION OF THE REPORT OF THE SECOND MINISTERIAL CONFERENCE ON DISASTER RISK REDUCTION

NAIROBI KENYA FROM 14 TO 16 APRIL 2010


DECLARATION OF THE SECOND AFRICAN MINISTERIAL CONFERENCE

ON DISASTER RISK REDUCTION HELD IN NAIROBI KENYA FROM 14 TO 16 APRIL 2010

We the Ministers and Heads of Delegations responsible for Disaster Risk Reduction in Africa having met in Nairobi Kenya on 16 April 2010 at the Second African Ministerial Conference on Disaster Risk Reduction concurrently with the First Conference of Ministers Responsible for Meteorology in Africa held from 15 ndash 16 April 2010 in Nairobi Kenya We express our sincere condolences and solidarity with the people and communities seriously affected by disasters in all its manifestations across Africa and other parts of the world and commend the efforts made by them their governments and the international community to respond to and overcome those tragedies We are convinced that disasters seriously undermine the results of development and poverty eradication and prosperity Development efforts that fail to appropriately consider disaster risk could seriously increase vulnerability of people and their livelihoods We therefore believe that coping with and reducing disaster risk to build resilience for sustainable development is a most critical challenge facing governments communities and the international community African countries cognisant of our joint endeavours to build our disaster risk reduction efforts believe it is our collective responsibility to support each other

I Take note of the proceedings of the Second Africa Regional Platform on Disaster

Risk Reduction consultative meeting held in Nairobi from 5-7 May 2009 at which

Governments Regional Economic Communities (REC) the African Union

Commission (AUC) NEPAD Planning and Coordinating Agency (NPCA) and United

Nations (UN) and non-UN partners discussed and proposed a draft extended

Programme of Action (2006-2015) for the implementation of the Africa Regional

Strategy for Disaster Risk Reduction in line with the Hyogo Framework for Action

(HFA) 2005-2015 lsquoBuilding the Resilience of Communities and Nations to

Disastersrsquo

II Endorse the Executive Summary of the Proceedings of the Second Africa Regional

Platform for Disaster Risk Reduction Consultative Meeting which includes the

recommendations of the Africa Platform to the Global Platform for Disaster Risk

Reduction held in Geneva from 16-19 June 2009

III Endorse the Proceedings of the Second Session of the Global Platform for Disaster

Risk Reduction ldquoCreating Linkages for a Safer Tomorrowrdquo which contains the Chairrsquos

Summary

IV Recall the African Union Assembly Decision on the Revised 1968 African

Convention (Algiers Convention) on the Conservation of Nature and Natural


Page 2

Resources and the Action Plan of the Environment Initiative of the New Partnership

for Africarsquos Development (NEPAD) at the Second Ordinary Session held in July

2003 in Maputo Mozambique

V Recall also the African Union Executive Council Decision on the Programme of

Action for the Implementation of the African Regional Strategy on Disaster Risk

Reduction (2006 ndash 2010) adopted at the Eighth Ordinary Session of the AU January

2006 held in Khartoum Sudan

VI Recall further the African Union Executive Council Decision on the Special Session

of the African Ministerial Conference on Environment (AMCEN) on climate change

held at Nairobi Kenya May 2009 adopted at the Thirteenth Ordinary Session of the

African Union Summit held in Sirte Libya June 2009

VII Recall all previous decisions on climate change

VIII Recall the decision of African Ministers of Finance in Lilongwe Malawi (29-30 March

2010) to ldquosupport efforts towards enhancing national and regional capacities to

mitigate exposure to disaster risk through institutionalising effective financial and

other instruments such as strategic grain reserves budgeted contingency funds as

well as through sharing risk across [sub]regionsrdquo

IX Acknowledge the positive efforts that many national governments in Africa have

made in integrating disaster and climate risk reduction in their development policies

and planning processes as well as into emergency response and recovery activities

and recognise the difficulties of many States to institutionalize enact and

decentralize these efforts and turn them into action

X Stress the need for the Africa Regional Platform to continue to advocate and provide

technical advice and support mechanisms by Regional Economic Communities

national governments and partners for the implementation of the Africa Regional

Strategy for Disaster Risk Reduction and its Programme of Action (2006-2015)

XI Stress the fact that there is a need for assessing the progress made by the African

Union Commission NEPAD Planning and Coordination Agency Regional Economic

Communities and Member States in order to accelerate the implementation of the

Africa Regional Strategy for DRR through its Programme of Action (2006-2015)

XII Call the attention of African leadership to the urgent need to strengthen sub-regional

mechanisms in order to achieve the objectives of the HFA and the Africa Regional

Strategy for Disaster Risk Reduction through the implementation of the Programme

of Action (2006-2015)


Page 3

XIII Emphasize the need for Member States to promote the creation of partnerships with

institutions dealing with disaster risk reduction such as National Meteorological and

Hydrological Services (NMHSs) the health and financial sector institutions

academia specialised centres research and scientific institutions NGOs and civil

society organisations for purposes of achieving the objectives of the Africa Regional

Strategy and Programme (2006-2015) and form part of a multi-sectoral National

Platform for Disaster Risk Reduction

XIV Recognise the negative impacts of climate variability and change including the

increase in the occurrence and severity of disasters and increased competition over

natural resources

XV Stress the special needs of most vulnerable countries and Small Island Developing

States and recognise their aspirations for sustainable development and need for

cooperation

XVI Recognise also that poorly planned urbanisation increases vulnerabilities which calls

for concerted actions by local governments and communities

XVII Stress the need for Member States to leverage new entry points for disaster risk

reduction by taking advantage of new developments since the inception of the Africa

Regional Strategy for DRR and integrate them into existing mechanisms

Hereby recommend to the African Union Summit

1 To request the African Union Commission to continue mobilising political support and to advocate for international community institutions and development partners to support Member States to institutionalise multi-sectoral National Platforms for disaster risk reduction or similar coordinating mechanisms that integrate disaster and climate risk management emphasising the mainstreaming of disaster risk reduction in planning and finance the health education urban development infrastructure energy water and sanitation industry agriculture and food security sectors among other national priorities

2 To call on the African Union Commission to reconstitute the Africa Working Group on Disaster Risk Reduction to provide coordination and technical support to Member States for the implementation of the Africa Regional Strategy for Disaster Risk Reduction and its Programme of Action

3 To call upon the African Union Commission NEPAD Planning and Coordination

Agency Regional Economic Communities (RECs) and Member States to create a network of capacity development institutions for training research and information management and exchange at country sub-regional and regional levels in collaboration with international and regional partners


Page 4

4 To request African Union Commission NEPAD Planning and Coordination Agency regional and sub-regional organisations and Member States to continuously monitor the implementation of the Africa Regional Strategy for Disaster Risk Reduction and its Programme of Action in line with the HFA and to assess and report biennially on the progress made

5 To request Member States to decentralize and implement local and community-

based disaster risk reduction strategies and programmes supported by adequate

realistic and predictable funding mechanisms with an enhanced role for local

governments and empower local and regional NGOs including volunteers

6 To strongly call upon Member States to incorporate gender equity and empowerment considerations in implementing the Programme of Action

7 To strongly urge Member States to increase their investments in disaster risk

reduction through the allocation of a certain percentage of their national budgets and other revenue dedicated to disaster risk reduction and report to the next Ministerial Conference considering other related African Ministerial resolutions

8 To call upon development and humanitarian partners to ensure that disbursement

of one percent (1) of development assistance and ten percent (10) of humanitarian assistance in line with the Chairrsquos Summary of the Second Session of the Global Platform supports disaster risk reduction preparedness and recovery including from violent conflicts andor severe economic difficulties

9 To call upon Member States under the auspices of the African Union Commission

to explore the feasibility of continental financial risk pooling in working towards the creation of an African-owned Pan-African disaster risk pool building on existing and emerging tools and mechanisms for financing disaster risk reduction

10 To call for a study into the establishment of a regional funding mechanism for

disaster risk reduction which allows Member States to access existing and future regional and global funds for climate change adaptation and disaster risk reduction

11 To make disaster risk reduction and climate change adaptation a national education

priority through their integration into the educational system including the development of curricula and the training of teachers

12 To call upon Member States to undertake vulnerability assessments of schools

health facilities and urban centres and develop and implement plans to ensure their safety and resilience

13 To encourage the development of capacities of and partnerships among Member States to access and utilise existing traditional knowledge space-based and other technologies for disaster risk reduction


Page 5

14 To call on the African Union Commission and the Regional Economic Communities to establish andor strengthen within their organisational structures functional sustainable affordable and dedicated disaster risk reduction units for coordination and monitoring

15 To call on the Regional Economic Communities to enhance the implementation of

their roles and responsibilities as stated in the Africa Strategy and Programme of Action

16 To call upon the Member States to adopt the revised Programme of Action for the

Implementation of the African Strategy for Disaster Risk Reduction (2006-2015) and to monitor progress

17 To invite the United Nations International Strategy for Disaster Reduction (UNISDR)

and partners to engage with African Union Commission Regional Economic Communities and African countries to support the implementation of this Declaration as appropriate and

18 To request the African Union Commission to take note of this Ministerial Declaration and to submit to the African Union Summit

THE SECOND AFRICA-ARAB SUMMIT SIRTE GREAT JAMAHIRIYA 10 OCTOBER 2010

AssemblyAfrica-ArabRes2 (II)

RESOLUTION FOR THE ESTABLISHMENT OF THE JOINT AFRICA-ARAB FUND FOR DISASTER RESPONSE

Resolution for the Establishment of the Joint Africa-Arab Fund for Disaster Response

We the Kings Leaders and Heads of State and Government of the Arab and African countries gathered at the Second Africa-Arab Summit in Sirte Libyan-Arab Jamahiriya on October 10 2010

Guided by the provisions of the Constitutive Act of the African Union and the Charter of the League of Arab States

Aware that the threats posed by natural or man-made disasters such as earthquakes floods drought desertification and the spread of epidemics and disease cannot be addressed by any State individually and that facing these requires mobilization of necessary resources in the framework of collective effort and solidarity

Convinced of the need to establish a joint mechanism to assist our countries in mitigating the effects of such calamities

1 Decide to establish a joint Africa-Arab Fund for Disaster Response

2 Decide Also that the resources of the Fund shall be from the following sources

Funds allocated from the budgets of the African Union and the League of Arab States

Contributions from Arab and African countries civil society organizations the private sector

Contributions from international partners and regional and international organizations

3 Mandate the Chairperson of the African Union Commission and the Secretary General of the League of Arab States to prepare the Statutes of the Fund and determine its objectives and modalities of its operation

Resolution L5

African risk capacity a Pan-African disaster risk pool The Conference of Ministers Recognizing the vulnerability of food-insecure populations as well as national economies to weather shocks the effects of which may be exacerbated by climate change Recalling the resolution for the Establishment of the Joint Africa-Arab Fund for Disaster Response (AssemblyAfrica-ArabRes2 (II)) adopted at the Second Africa-Arab Summit in Sirte Libyan-Arab Jamahiriya on October 10 2010 to establish a fund for disaster response the Statutes objectives and modalities of which are to be defined by the AUC and the league of Arab States Acknowledging that the current system of ad hoc unpredictable funding for disaster response causes the depletion of critical assets and the reallocation of government resources from planned investment in times of crisis slowing economic growth and creating significant setbacks to development Recognizing the decision taken by the Third Joint African Union Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance Planning and Economic Development held in Lilongwe Malawi in March 2010 (EX CL596(XVII)) to ldquosupport efforts towards enhancing national and regional capacities to mitigate exposure to disaster risk through institutionalizing effective financial and other instruments such as strategic grain reserves budgeted contingency funds as well as through sharing risk across regionsrdquo

1 Welcomes the African Union Commissionrsquos proposal to work towards the establishment of African Risk Capacity an African-owned pan-African disaster risk pooling facility that would provide contingency funds to participating African Union member States in the event of extreme weather shocks and appreciates the Commissionrsquos leadership in exploring the feasibility and design of such a facility that would complement and not duplicate existing structures and initiatives

2 Supports the proposed consultation to be held with African Union member States in

South Africa in early May 2011 where the findings to date will be shared and discussed and the results of which will inform the Commissionrsquos report to the Executive Council at the June 2011 African Union Summit to be held in Malabo Equatorial Guinea

3 Invites African Union member States to support the Commissionrsquos efforts through

contributions to the design phase of the Risk Capacity project 4 Endorses the interactive process in question and commits to providing support to

the above-mentioned discussions at the country and regional levels


ARC BRIEFING BOOK

Contents

Section 1 ndash An Introduction to the African Risk Capacity Project 1 What is the African Risk Capacity (ARC) 2 Tanzania Brief 3 Chairperson of the African Union Commission HE Dr Jean Pingrsquos Comments on the ARC

ldquoSheltering the Most Vulnerablerdquo Editorial Financial Times This is Africa SeptOct 2011 68-69 Print

Section 2 ndash A Closer Look at the African Risk Capacity and Africa RiskView Software 4 ARC Summary Note 5 Africa RiskView Technical Bulletin 6 East Africa Brief 2011

Section 3 ndash Diplomatic Notes and Policy Decisions 7 Note Verbale on the ARC to All Member States of the African Union 8 Aide Memoire on the ARC 9 Decisions taken on the ARC by African Ministerials and Policy Organs of the African Union

AFRICAN UNION








2 Tanzania Brief




AFRICAN UNION























AFRICAN UNION

AFRICAN UNION









Introduction






Poor rains

Below average

Normal

Above average

Far above average

AFRICAN UNION








0

10

20

30

40

50

60

70

80

90

100




-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000



Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary




$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000


Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary





































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5












2 Tanzania Brief




AFRICAN UNION























AFRICAN UNION

AFRICAN UNION









Introduction






Poor rains

Below average

Normal

Above average

Far above average

AFRICAN UNION








0

10

20

30

40

50

60

70

80

90

100




-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000



Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary




$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000


Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)











natural resources



cooperation












Page 4





















Page 5























Resolution L5



























AFRICAN UNION

AFRICAN UNION









Introduction






Poor rains

Below average

Normal

Above average

Far above average

AFRICAN UNION








0

10

20

30

40

50

60

70

80

90

100




-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000



Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary




$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000


Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation
































Page 5























Resolution L5








AFRICAN UNION









Introduction






Poor rains

Below average

Normal

Above average

Far above average

AFRICAN UNION








0

10

20

30

40

50

60

70

80

90

100




-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000



Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary




$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000


Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4











































Resolution L5








AFRICAN UNION








0

10

20

30

40

50

60

70

80

90

100




-

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000



Max ARC Payout

Indicative Premium

Indicative Savings

5 $470M 19 17

7 $350M 17 23

10 $250M 13 33

15 $160M 11 41

20 $110M 8 57

Summary




$-

$20000000

$40000000

$60000000

$80000000

$100000000

$120000000

$140000000

$160000000


Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5









Perspectives

Jean Ping















member states can

illu

sTr

ATio

n r

ich

Ar

d A

llen







oTo

co

rb

is



4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5










4 ARC Summary Note





AFRICAN UNION



SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5










SUMMARY NOTE


a) Background





AFRICAN UNION



b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5










b) Objectives












c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5










c) Risk Pooling


1 Overview












in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5


















in country























SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5














SEVERITY






















for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5




























for countries



and guidelines














































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5

















































Risk Retention

Risk Pooling

Risk Transfer

Contingency Funds

Parametric









Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5












Introduction


















AFRICAN UNION

Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








Technical Overview








Water Deficit


Water Excess



















Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5
























Case Study


Step 1


Step 2


Step 3


Step 4


Step 5










TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5
















TERMS WRSI

Deductible

Ceding Percentage

Limit










AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5














AFRICAN UNION






Introduction





AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








AFRICAN UNION











Frequency (Years)

Stand Alone

ARC Pool

1-in-5 16 12

1-in-7 16 8

1-in-10 15 5

1-in-15 15 4


HIGHLIGHTS








1

Country Brief Kenya







AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








AFRICAN UNION






GU 2011 BELG 2011 DEYR 201011




Frequency (Years)

Stand Alone

ARC Pool

1-in-5 18 14

1-in-7 17 9

1-in-10 16 6

1-in-15 15 4




BELG 2011 GU 2011 DEYR 201011

AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








AFRICAN UNION


Disclaimer















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5





















AFRICAN UNION

AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








AFRICAN UNION

UNION AFRICAINE

UNIAtildeO AFRICANA



Information Note


2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








2




3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5








3






Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5












Page 1












Disastersrsquo







Summary




Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5









Page 2


































of Action (2006-2015)


Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5









Page 3










natural resources



cooperation












Page 4





















Page 5























Resolution L5









Page 4





















Page 5























Resolution L5









Page 5























Resolution L5






















Resolution L5








African Union African Risk Capacity ARC Briefing Book Rockefeller Foundation

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Transcript of African Union African Risk Capacity ARC Briefing Book Rockefeller Foundation