Mobile Drought-Insurance Schemes Spread Across Africa
Category: Business News
Written by Gemma Thomas
Africa is a rich and fertile continent, which has been an economic powerhouse in the past and may well be so again in the future. However, the economies of many African nations are more subject than they would like to the vagaries of the climate and other such uncontrollable factors. As Nigeria is currently all too well aware, the fluctuations of the global resources market can have a devastating effect upon African economies which are in hock to it. The problem is that many African nations, while advancing economically, are still unable to achieve prosperous self-sufficiency due to various factors, not least of which is the precariously climate-dependent nature of many small African businesses. However, new insurance initiatives aim to change all of that. Small, mobile drought insurance providers offer farmers the potential to protect their interests and to keep them economically afloat, offering greater stability and long-term prospects for small African business. It’s a tempting prospect, and one which offers hope to many otherwise struggling African agricultural enterprises. Little surprise, then, that the concept is starting to really expand throughout Africa.
There are a few problems facing new and small African business. Lack of capital is one - it’s a trueism that you need to have money in order to make money. Underdeveloped infrastructures - logistical and economical - do not help either. Risk is also one of the biggest problems for an up and coming African entrepreneur. Often due to the aforementioned capital issues, many African farmers and business people decide (or are forced) to forgo underpinning their businesses with precautionary measures, hoping that the business will make enough money to buy insurance etc before long. Sadly, the external forces to which all business are subject frequently come into play before the requisite measures can be put in place - and a horrible number of uninsured African businesses are unable to weather the storms of fate. Without insurance, a business has no chance of recovering from an economic cataclysm, meaning that it (and all who rely upon it) are frequently left destitute. With insurance, however, the cost of a disaster can be covered, shoring up the business and helping it to build back and up after a problematic time. For farmers in particular, this could be vital.
Vulnerable Farmers
Farmers, and other people who work on the land, are absolutely vital to the majority of African economies (indeed, the majority of world economies). However, they are sadly more vulnerable than most to the whims of the climate. There’s only so much you can do to protect your crop - and there’s no amount of hard work and expertise which will protect your farm against the rigours of a drought. Drought has frequently subjected African agriculture - particularly that of Sub Saharan Africa - to some tremendously difficult times. The economic and the human impact of the terrible droughts in the 1990s are still reverberating through the continent today, yet farmers still remain vulnerable. However, while drought insurance can’t magic water up out of nowhere, it can potentially help farmers to survive droughts - which, in theory, could have effects across the entire economy. If farmers are more able to support themselves, then they are also more able to contribute to the nation. This in turn means that there is more potential for national economies to pay for drought contingency schemes, reducing the risk of widespread famine and so forth.
Mobile Drought Insurance
Mobile drought insurance schemes began in Kenya, and have proven immensely popular. The theory is simple: farmers make a weekly or monthly payment (amounts usually negotiable), and in return the company allots a payout should the farm be hit by adverse conditions. What makes these mobile schemes so very popular is the flexibility of the model, and the fact that claim forms do not have to be filled out (payouts are automatically generated according to weather reports). It’s a pay as you go system, meaning that farmers need not worry too much about getting themselves embroiled in unfulfillable contracts, and it has widespread support from governments and international bodies - meaning that the funds are unlikely to dry up any time soon. Currently, more and more African nations are in the process of seizing this business model and applying it to their own nations, in the hope that this could prove the answer to Africa’s persistent agricultural troubles. If Africa’s farmers can be covered by insurance, then the potential for the bottom falling out of African economies is drastically reduced.
Related Posts via Categories:
- Skye Bank Sacks 200 Staff
- Ecobank Sacks 1,040, Diamond Bank 200, FBN 1000 Workers
- Comrade Itodje Bags Africa Icon Most Supportive Blogger of the Year Award
- First Bank to Sack 1,000 Workers
- Nigerian Food and Beverages Industry Set to Sack 3million Workers Over Forex Crisis
- Diamond Bank Marketer Who Fled With Customers N309,000 Deposit Arrested
- Skye Bank Debunks EFCC Investigation Report – Official
- 'I Can Bring Dollar Down to N200 in One month' - Ifeanyi Ubah
- Attend The Social Media Jury at Social Media Week 2016
- Naira falls to N345/$ in parallel market
- BDC operators import dollars from Ghana, Benin Rep and other countries
Send stories for publishing to admin@ackcity.net
Be Our Fan On Facebook
Follow Us @ACKCITY On Twitter
BB: 568235DD
Channel Pin: C00352CD2,
WhatsApp: (234) 08105649346
Call: (234) 08105649346, 08121807240, 09081122570
E-mail: admin@ackcity.net
No comments