Lagos, Nigeria, March 26, 2019—IFC,
a member of the World Bank Group, today announced that it has signed an
agreement with Africa RE, a pan-African reinsurance company headquartered
in Nigeria, to help thousands of small holder Nigerian farmers more easily
access insurance to protect their crops and livelihoods.
Under the agreement, Africa RE and IFC’s
Global Index Insurance Facility will help Nigerian insurance companies
licensed by Nigeria’s insurance regulator, NAICOM, develop agricultural
insurance products, and deepen their index insurance business lines. These
index insurance products will help protect farmers against environmental
risks such as drought, floods, erratic rainfall, and other natural hazards.
Index-based agricultural insurance, which
pays out based on transparent parameters like rainfall and does not require
costly field visits to verify losses, is an innovative and efficient way
for farmers to protect themselves against losses.
Africa RE’s Deputy Managing Director/Chief
Operating Officer, Ken Aghoghovbia, said, “We are excited to be partnering
with IFC in assisting Nigerian insurers develop appropriate insurance products
for small holder farmers. This initiative will certainly help move Nigeria
towards its goal of food security and it is in line with Africa RE’s mission
to support African economic development.”
Eme Essien, IFC Country Manager for Nigeria,
said, “IFC’s support for affordable and accessible agricultural insurance
will help Nigeria’s farmers mitigate the effects of climate-related shocks,
protecting them against catastrophic losses and unlocking access to finance.
Developing a sustainable agricultural insurance industry also requires
a strong commitment from regulators, such as NAICOM, who embrace innovation
to help farmers manage their risks.”
Farmers with crop insurance are also more
likely to access other financial products, including credit, and to invest
in higher quality production inputs. However, the traditional insurance
market has largely failed to meet smallholder Nigerian farmers’ demand
for affordable insurance with its high premiums and transaction costs.
IFC’s and Africa RE’s specific support
to insurance companies will include helping them design specialized insurance
products and develop digital platforms so farmers can easily view and compare
index insurance offerings from various providers. IFC and Africa RE aim
to provide thousands of farmers with access to insurance by the end of
About the Global Index Insurance Facility:
The Global Index Insurance Facility (GIIF)
is a multi-donor program that was created to address the scarcity of affordable
insurance protection against weather and catastrophic risks in developing
and emerging countries. Its main objective is to promote the development
of effective and sustainable markets for index-based weather and catastrophic
risk insurance in such countries. The facility is part of the World Bank
Group’s Finance, Competitiveness, and Innovation Global Practice and is
funded by: the European Commission/the African, Caribbean and Pacific (ACP)
Group of States; the Netherlands Ministry of Foreign Affairs; the German
Federal Ministry of Economic Cooperation and Development (BMZ); and the
Japan Ministry of Finance.
IFC—a sister organization of the World Bank
and member of the World Bank Group—is the largest global development institution
focused on the private sector in emerging markets. We work with more than
2,000 businesses worldwide, using our capital, expertise, and influence
to create markets and opportunities in the toughest areas of the world.
In fiscal year 2018, we delivered more than $23 billion in long-term financing
for developing countries, leveraging the power of the private sector to
end extreme poverty and boost shared prosperity. For more information,