Harare – KfW of German Government and the World Food Programme (WFP) have each pledged US$2 million in premium financing towards assisting Zimbabwe’s efforts in overcoming fiscal challenges that have been brought about by the global Covid-19 pandemic that will see a maximum insurance cover of US$20 million being unlocked.
Under the arrangement, Zimbabwe will also contribute US$500 000 towards the premium financing.
Delivering his 2021 Budget Speech in Parliament yesterday, Finance and Economic Development Minister, Professor Mthuli Ncube conceded that despite the country’s commitment towards ensuring drought risk is mitigated for the 2020/21 agricultural season, fiscal challenges were a major deterrent.
“Zimbabwe is committed to participate in the 2020/21 African Risk Capacity (ARC) programme.
“To relieve fiscal challenges that member states face in paying their premiums compounded by the effects of the Covod-19 pandemic, ARC has facilitated application of premium subsidy from KfW of German Government towards premium funding for the 2020/21 agricultural season.
“KfW of German Government and the WFP have committed to premium financing of US$2 million each, to support Zimbabwe, whilst Zimbabwe will contribute US$500 000 towards premium financing. This will unlock maximum insurance cover of US$20 million,” he said.
Zimbabwe also participated in the ARC drought risk insurance policy in the previous 2019/20 season which resulted in the country receiving a total payout of just over US$1,7 million in June this year.
The payout targeted assisting selected vulnerable households lying in the worst drought affected districts through cash transfers to mitigate food insecurity.
Beneficiaries were drawn mainly from Chivi in Masvingo, Buhera in Manicaland, Binga in Matabeleland North, Bulilima in Matabeleland South and Uzumba Maramba Pfungwe in Mashonaland East.
