Drought Image (Supplied)
The devastating crisis in Madagascar sounds a stark warning of the need to take urgent action for Africa according to Ibrahima Cheikh Diong, Director General of the African Risk Capacity Group.
“Drought may well be the next pandemic after COVID-19 and there’s no vaccine to cure it.” If the words of Mami Mizutori, the UN Secretary General’s Special Representative for Disaster Risk Reduction don’t compel us to take immediate action, Africa will continue to bear the scars of barren wastelands caused by climate change-induced drought. Southern Africa, East Africa, the Horn of Africa and now Madagascar are just the start. The short-term solution to building resilience requires a multi-faceted approach involving both private and public sectors, says Diong.
“Our affiliate, ARC Ltd, which recently received a BBB+ Insurer Financial Strength rating from Fitch, works with governments, NGOs and funders to provide customised parametric insurance. This empowers African governments and NGOs to respond swiftly to natural disasters on the continent, but there’s a lot of work that needs to go into building distribution networks to ensure that we can reach as many people as possible. We need to build a coalition of the private and public sector,” Diong adds.
While governments are key in dealing with resilience to climate change, it’s the ability of the private sector to take action that will make all the difference, he says.
“Partnerships should extend beyond governments. The private sector is an essential partner for leveraging funding and experience demonstrates that private-sector entities are capable of rapidly taking up opportunities when and if these make sense from a business angle.”
There are several examples where a collaborative approach is already working well. Diong cites ARC Group’s partnerships with organisations such as the Start Network and World Food Programme (WFP), and funders such as the German Development Bank, UK Foreign, Commonwealth & Development Office and African Development Bank which are working to provide that resilience for African countries.
Shifting the disaster risk architecture
Emily Jones, as Climate and Disaster Risk Financing Advisor for WFP, highlights the challenges of convincing authorities to be more proactive than reactive when preventing human suffering and hardship when events like drought occur.
“Unfortunately, no one person or organisation can make the necessary shift alone. Change starts with building resilience and insurance plays a significant role in that, particularly in climate change,” says Jones.
Governments pay a premium every year and receive their agreed-upon pay-out if and when a predicted disaster occurs. “This money can then be used to help those people affected, with the remainder of the pay-out going towards covering other consequences that might not have been expected, such as conflict or a loss of progress in terms of important local development projects,” she says.
“Humanitarians are working on highlighting the need to predict crises and act before they manifest in an effort to avoid human suffering. After all, why wait if you don’t have to?”
Jones speaks about how most authorities in African countries perceive insurance as a gamble when it should rather be seen as a risk management tool. Unfortunately, many simply don’t have the necessary tools available to plan, which is where ARC comes in.
“It’s amazing that ARC Limited is offering this type of insurance. However, insurance is really only cost-effective for catastrophic events that happen infrequently – perhaps once every 10 years – and if the governments that they’re selling the insurance to don’t have other solutions, they’re going to be taking out insurance that’s less than optimal,” Jones explains.
“So, something that WFP, ARC, and the African Development Bank wants to work on in the coming years is a risk-layering approach. This would involve introducing other tools for coping with those medium-scale events so that we can optimise ARC and hopefully offer better products, as well as ensure improved buy-in, a greater understanding of the products’ importance, and a track record of success,” she adds.
Responding swiftly to natural disasters
Since ARC Limited was established in 2014, the company has paid out $65-million in drought-relief efforts to seven different countries.
“In particular, the collaboration between the African Development Bank and ARC shows how coming together makes a major difference. In 2020, the ARC drought-relief pay-outs to Zimbabwe, Madagascar and Côte d’Ivoire totalled $6-million,” says Diong.
Madagascar received a payment of over $2,1-million, which was allocated to food assistance for 15,000 households, nutritional support to 2,000 children and 1,000 pregnant and breastfeeding women, and water supplies to over 84,000 households.
Reaching the most vulnerable, however, is difficult, adds Malvern Chirume, Chief Underwriting Officer ARC Limited. “One of the big challenges is access to the final customer, bearing in mind that most of our beneficiaries of the programmes are small- to medium-scale farmers and therefore it’s not cost-effective to access them one at a time.”
With climate change, we can expect extreme weather events to hit harder and more frequently in coming years. In a 1.5 degree warmer world, there is no doubt that drought will be a more regular event.
The GAR Special Report on Drought 2021 launched earlier this year is a call to action: we must act now if we are to meet the goals of the Sendai Framework for Disaster Risk Reduction, the 2030 Agenda for Sustainable Development, and create a safer, more resilient, risk-proofed future for all.
“Drought is not something that hits us suddenly, nor something that we can quarantine our way out of. Drought manifests over months, years, sometimes decades, and the results are felt just as long. Drought exhibits and exacerbates the social and economic inequalities that are deep-rooted within our systems and hits the most vulnerable the hardest,” says Chirume.
“While we may not be able to prevent it, we can certainly be prepared to deal with its impact by building resilience and providing swift support to those who are left vulnerable.”
Nestlé ESAR announces industry-first pilot that reduces carbon dioxide emissions and recycles wastewater
Nestlé ESAR industry-first pilot launch (Image: Supplied)
In partnership with The Emissions Capture Company, Nestlé has successfully piloted leading machine learning-based technology in Babelegi, at industrial scale, to deliver significant Scope 1 emission reductions, and wastewater recycling.
Today, Nestlé – ESAR East and Southern Africa Region (ESAR) unveiled an industrial scale pilot project that has successfully tested a global-first, Artificial Intelligence technology in Africa that reduces emissions and saves water, at its Babelegi factory in Pretoria. The industrial scale pilot project is a partnership with The Emissions Capture Company (ECCO) using its proprietary WhiteBoxTM technology, a machine-learning based system that captures Scope 1 carbon dioxide (CO2) emissions and recycles wastewater.
Speaking on the partnership, Saint-Francis Tohlang, Corporate Communications and Public Affairs Director at Nestlé ESAR, said: “Our global commitment to reduce our impact on the environment influences every part of our business today. This partnership with ECCO demonstrates a significant evolution of our production processes to embrace circular principles at every step. We are extremely proud to be pioneering this industry-first technology on the African continent. This success takes us to the next phase, where we will be looking to scale this operation to other factories to deliver significant reductions in Scope 1 emissions in ESAR.”
The WhiteBoxTM set-up in Babelegi has been in successful operation for over 8,000 hours. The technology captures CO2 from flue gas emissions, recycles industrial wastewater and creates sustainable green products. The green products can be sold directly (for animal feed, human food, consumer goods, cosmetics and pharmaceuticals) or used to eliminate sulphur dioxide (SO2) emissions without the need for water. Data collected from the industrial scale pilot coupled with industry-first machine learning techniques, demonstrates that the WhiteBoxTM can be calibrated to capture between 25% to 70% of Scope 1 CO2 emissions and recycle available industrial wastewater per site. Much of this is done through direct air capture and energy-efficient gas processing, using low-fuel consumption methods.
“We are proud to have partnered with Nestlé in successfully demonstrating the capabilities of our cutting-edge technology set. ECCO uses green chemistry and Artificial Intelligence to extract CO2 from emissions, using it as an ingredient in everyday products. This partnership helps pave the way for a green economy. Our approach was holistic, ensuring that pollution remediation was key, along with other considerations such as water recycling and low fuel consumption. By design, the shift from legacy technologies to low carbon emission processes also improves livelihoods through employment creation, training, and upskilling,” says Thomas F Darden, ECCO’s CEO and founding board member of William McDonough’s Cradle to Cradle Products Innovation Institute and board member for Yale Center for Environmental Law & Policy.
“The industrial scale pilot project directly upskilled and employed 15 people from the local community and has the potential to create more jobs when scaled. Part of the operation has also included skills development for the rest of our staff at the facility to ensure a just transition to low emission operations, with no one left behind,” concluded Tohlang.
ECCO’s WhiteBoxTM joins several ongoing long-term projects under Nestlé’s RE sustainability initiative, that reinforces the company’s sustainability initiatives, strategies as well as its resources to help mitigate sustainability challenges such as waste reduction.
Nestlé launches RE Pilot Project to empower informal waste reclaimers in Tembisa, Gauteng
In celebration of National Recycling Week and Let’s Do It World Clean-up Day 2021, Nestlé East & Southern Africa Region joined forces with Kudoti, a waste tech start-up, to launch its ‘RE-Imagine Tomorrow’ pilot project in Tembisa to demonstrate how the circular economy is a viable solution for tackling the waste problem.
By working with Kudoti and Destination Green, the implementation partner and buy back centre, Nestlé will enable 100 waste reclaimers to use technology to track the amount of waste collected and find buyers through Kudoti’s technology platform and network. The waste collectors will be empowered and trained on how to make an income and will receive a monthly stipend through a subsidy by Nestlé. Training will include business and finance education to equip the waste reclaimers to further boost their incomes along with the provision of physical resources such as protective gear. One of the other elements contributed by Nestlé will be the purchase of a forklift to further assist the operation in the long run.
The ‘RE-Imagine Tomorrow’ pilot project will be a phased intervention for the community of Mqantsa, Tembisa. The beginning of the phase is about awakening a focused increase of waste collection through the informal waste reclaimers. Engage will include educating the community on rethinking their relationship with waste and reducing their own waste footprint. Finally, the sustain phase will bring to life repurposing by creating beauty out of waste for the benefit of the community through public furniture created from the waste collected. The circular economy model aims to use waste streams as secondary resources and recover waste for reuse and recycling. This approach is expected to achieve efficient economic growth while minimising negative environmental impact.
Saint-Francis Tohlang, Corporate Communications and Public Affairs Director at Nestlé East and Southern Africa Region (ESAR),adds . “Informal waste reclaimers play an important role in the management of waste. It is important that we appreciate their role as heroes and find ways in which we can empower them further as we strive for a waste free future. This pilot project is part of our broader RE sustainability initiative which focuses on the pillars of rethink reduce and repurpose. Through working with a tech start-up, waste collectors, recyclers and the community, we believe we are engaging key stakeholders in the waste management cycle to be able to RE-imagine tomorrow. We hope that through this pilot project our partners and the community of Tembisa will see that there are opportunities that can be found in what we see as waste.”
The RE initiative encourages society to RETHINK, REDUCE and REPURPOSE. The RETHINK pillar is about encouraging broader society to rethink its relationship with the environment. Nestlé will educate the public about ways to change their behaviour to serve the environment through responsible practices such as recycling. The REDUCE pillar highlights Nestlé’s commitment towards reducing its environmental impact to zero carbon emissions by 2030. Lastly, the REPURPOSE pillar focuses on upcycling and reusing materials which are crucial to driving a circular economy.
“Through this initiative, we hope to drive a paradigm shift by formulating and implementing solutions that will safeguard the environment. We hope that initiatives such as RE will encourage people not only in Tembisa, but across the country, to play their part and RETHINK, REDUCE and REPURPOSE,” concluded Tohlang.
Members of the community and over 20 waste reclaimers, along with Nestlé, Kudoti, Destination Green and members of the media took part in a clean-up in Mqantsa, Tembisa on the day to strengthen its collective contribution to a waste-free future for the community.
Shifting Africa’s climate change disaster risk architecture before COP26 and beyond
All eyes are on the existential crisis posed by climate change as the United Nations Framework Convention on Climate Change (UNFCCC COP26) approaches, with many warning that lessons for dealing with climate change threats must be learned from how Africa has handled the current COVID crisis.
Resilience in Africa to these climate change impacts can only be built with the assistance of developed countries and these have a vested long-term interest in providing this support, says Ange Chitate, COO African Risk Capacity Limited.
“Beyond COVID, the most critical risk to Africa is the availability of water, which is directly linked to climate change. The continent is extremely vulnerable to and bears the brunt of drought, flooding, cyclones and other climate change-led weather events, even though it has actually had very little impact on carbon emission,” says Chitate.
This is particularly serious for a continent like Africa which depends so heavily on agriculture for its economy and employment.
“When one considers that agriculture sustains two thirds of Africa’s employment and that more than 80% of agriculture in Africa is conducted by small- to medium-scale farmers who are at the mercy of climate change events completely out of their control, COP26 talks have to deliver practical and meaningful support from developed countries to help ensure a high level of preparedness in the developing world for what is being touted as the next pandemic,” Chitate adds.
It is a view shared by South Africa Forestry, Fisheries and Environment Minister Barbara Creecy, who says if COP26 is to be successful, developing countries need support from developed countries in the form of finance, technology and capacity building.
South Africa’s suggested global goal on adaptation sees focus being placed on “the most vulnerable people and communities; their health and well-being; food and water security; infrastructure and the built environment; and ecosystems and ecosystem services, particularly in Africa, Small Island states and Least Developed Countries”.
Minister Creecy also calls on developed countries to ensure access to long-term, predictable and affordable finance for developing communities.
Building Africa climate change resilience through natural disaster insurance relief
“There’s a responsibility for G7 countries to support Africa in managing the impact of climate change by, for example, providing sovereigns with parametric insurance premium finance to help them respond swiftly and decisively to crises fueled by climate change on the continent,” says Delphine Traoré, ARC Limited Non-Executive Director.
Established in 2014, ARC Limited provides natural disaster insurance relief to African countries which have joined the sovereign risk pool.
Along with its partners, which provide premium support, the insurer has already paid over US$65m to seven countries to provide drought relief and address the economic concerns these countries’ most vulnerable citizens face.
Governments then make payments to the most vulnerable households in drought-stricken or other climate-affected areas so the most vulnerable communities can supplement their food budgets if reduced harvest tends to push up food prices.
“Our role is explaining to African governments the importance of having this type of insurance and accounting for food security and disaster risk in their budgetary work process.
“There’s been a lot of work done by ARC Limited with the support of the African Development Bank and other financial institutions to see how we can support these countries with a super replica programme. We need to do more still to find a sustainable way to do premium financing for countries that are not able to afford it but that are quite impacted by climate change impacts,” says Traoré.
Most recently, ARC Limited paid out US$2.1m to the Madagascar Government to meet the food security needs of over 600,000 people affected by the devastating drought.
ARC Limited’s role as a parametric insurer is critically important in building resilience and ensuring a country is able to bounce back swiftly after a natural disaster. “We monitor the rainfall of countries in the risk pool and sovereign insurance pay outs are triggered when the system reveals that there hasn’t been enough rain, before droughts get to a crisis stage, farmers are left with nothing and people are starving,” explains Chitate.
The programme further helps countries build capacity to manage climate-related risks. In this way it attempts to shift the disaster risk management architecture to be proactive, not reactive, says Chitate.
“We see a tangential benefit of this type of programme being the increasing sophistication of countries to better understand risk. The current COVID pandemic is a good example of this.
“When dealing with risk mitigation and management, one needs to examine the reason why governments don’t act. On the insurance side, one of the issues to address is around premium affordability because it’s quite expensive to insure against natural disasters and payment of premium competes against other national priorities,” explains Chitate.
Sovereigns which participate in the ARC programme must also develop a contingency plan which sets out at a very high level how the government would spend any insurance pay out they receive from ARC.
“Through this plan, we ensure the funds get to the intended beneficiaries. Having a plan increases dramatically the speed of execution because at a point the government received the funding, it already has a plan on how to disburse this,” she says.
With US$100 million in its kitty, ARC says it probably has the largest balance sheet dedicated to climate risks in Africa.
Afripreneur2 days ago
African Diaspora: The face behind the only Black woman founded and led ice cream brand in Amsterdam
Featured2 days ago
WorldRemit Study: Several Countries Spend More than 50% Their Monthly Income on Christmas
Banking / Insurance15 hours ago
Microinsurance is driving greater financial inclusion, says aYo Ghana CEO
Africa speaks15 hours ago
COVID-19 4th Wave: Can Africa Stand Alone?