The Sunday News
Judith Phiri, Business Reporter
The Zimbabwe Agriculture Index Insurance project developed by the Insurance and Pensions Commission (IPEC) and International Finance Cooperation (IFC), which is targeted at smallholder farmers, has been launched.
Speaking during the virtual launch of the project on Tuesday, IPEC Commissioner Dr Grace Muradzikwa said the project is expected to go a long way in raising awareness of the importance of agriculture index insurance as well as the development of the index insurance market in Zimbabwe.
She said: “Today marks an important milestone on the project timeline, as we launch the Zimbabwe Agriculture Index Insurance. As we are all aware, agriculture is the cornerstone of Zimbabwe’s economic growth and development. The sector plays an important role by providing resources for the mainstream industry in the economy.”
Dr Muradzikwa said the scope of the project includes assessment of the risks smallholder farmers face, how they are coping with those risks, and gauge their appetite for agricultural insurance.
She said it will also involve development of a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe’s farmers.
Following the project launch, the next step is now to assess the market. This consist of the agricultural value chain assessment, engagement with insurers and farmers to assess the demand and supply of agriculture index insurance products and associated constraints.
Part of this stage has already been accomplished with the hiring of survey and risk modelling consultants; Dr Muradzikwa revealed.
“The stages will also see analysis of the regulatory and policy environment,” she said.
After the market assessment stage, the next step would be regulatory framework development.
This stage entails regulatory gap analysis and knowledge exchange forums to inform the development of the agriculture index regulatory framework.
“A roadmap for the implementation of the agriculture index insurance in Zimbabwe will also be developed Zimbabwe,” said Dr Muradzikwa
“We expect that effective June 2023 the project would have been completed and a regulatory framework to regulate agriculture index insurance would be in place.”
Dr Muradzikwa said work on the Zimbabwe Agriculture Index Insurance project comes at a time “the agricultural sector is faced with uncertainty due to climate variability and change”.
Speaking during the launch, IFC Country Manager for Southern Africa, Mr Adamou Labana said the new partnership “will allow IPEC and IFC to develop a solid foundation for agriculture insurance in the country”.
“We believe that a strong and inclusive insurance market will strengthen the resilience of farmers at all scales of production, and will ultimately improve farmers’ access to other products and services such as quality inputs and financing. Supporting the agribusiness sector and financial inclusion are important elements of IFC’s strategy for Zimbabwe,” said Mr Labana.
The IFC and IPEC in February 2022, signed an agreement, under the banner – Agriculture Insurance Support Project whose objective is to develop agricultural index-based insurance to protect smallholder farmers from climate-related crop losses in Zimbabwe.
Upon successful completion of the project, agricultural index-based insurance will be offered by insurance entities, not by IFC and IPEC.
