What lessons should African countries learn from this year's drought?


A number of Sub-Saharan African countries are facing drought which serves as a wake up call to regional economies to start building shock absorbers that will help contain such challenges in the future.

Mohamed Beavogui, Director General of African Risk Capacity (ARC), told CNBC Africa that insurance was one way but had its limitations when it comes to reaching small holder farmers.

Beavogui says penetration of insurance into small holder farmers was still very low due to affordability and expenses attached to reaching them.


“Insurance is expensive and farmers are very poor hence [they] cannot afford, [insurance]” Beavogui told CNBC Africa.

With no insurance and poor performance in the commodities space, many African countries are left with a begging bowl to the developed world.

“The demand for mining products is getting lower and lower especially because of the Chinese economy slowing down. Companies cannot continue producing as there is no market to consume our goods, this calls for forward planning,” he says.

Beavogui added that African economies should start working on building safety nets.

According to an analysis by the ARC, the widespread catastrophic drought in Sub-Saharan Africa today could cost upwards of three billion US dollars in emergency assistance.

ARC says this would put an unprecedented financial strain on African countries and donor countries’ aid budgets.

“As currently structured, the system for responding to natural disasters is not as timely or equitable as it should, or could be, with much of the cost borne by farmers,” says ARC in a statement on its website.