Mozambique has received a $2 million drought insurance premium under the African Development Bank’s Africa Disaster Risk Financing (ADRiFi) Programme, marking its third consecutive year of coverage and reinforcing the country’s commitment to proactive climate preparedness. The announcement was made during the 2025 Climate and Disaster Risk Financing Forum held in Maputo, where leaders from 16 African nations gathered to assess the continent’s progress in climate risk management.
The ADRiFi Programme, launched in 2018, is Africa’s first continent-wide initiative to institutionalize sovereign climate risk insurance. It aims to protect governments against the economic shocks of droughts, floods, and cyclones that collectively cost the continent between $7 and $15 billion annually. The scheme integrates parametric insurance mechanisms, where payouts are triggered automatically by data-driven thresholds, into national fiscal frameworks, ensuring governments can respond swiftly to climate disasters without derailing public finances.
The $2 million premium provided to Mozambique for the 2025–2026 agricultural season reflects an ongoing partnership between the AfDB and the Mozambican government to embed financial resilience into national planning. The African Risk Capacity (ARC) Group administers the insurance coverage, guaranteeing rapid disbursement once rainfall or crop-loss thresholds are met.
At the Maputo forum, Albertina Fruquia Fumane, Permanent Secretary at the Ministry of Finance, described the insurance mechanism as “a strategic instrument that allows the state to act before disaster strikes, protect vulnerable communities, and stabilize the economy.” This perspective underscores a crucial shift in African climate governance, away from reactive disaster response toward anticipatory, evidence-based resilience planning.
Since its inception, ADRiFi has mobilized over $150 million in climate insurance financing across 16 African countries, protecting more than six million people. Supported by a Multi-Donor Trust Fund involving the United Kingdom, Switzerland, Canada, Norway, and the Netherlands, the programme subsidizes insurance premiums while building capacity in risk modelling and public finance management.
AfDB’s Lead for De-Risking Agricultural Finance and Climate Resilience, Andrew Mude, noted that the expansion of ADRiFi “demonstrates the urgency of embedding financial preparedness at the heart of Africa’s climate response.” He added that the success of the initiative “lies not only in payouts but in governments taking ownership of risk management as a central policy instrument.”
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Field visits during the forum brought delegates to Magude District, one of Mozambique’s drought-prone regions, where they observed how earlier payouts have supported communities through targeted interventions. Funds have been used to provide drought-resistant seeds, livestock feed, and cash transfers, enabling farmers to recover quickly and avoid long-term displacement. The visit illustrated how such instruments transform climate insurance from an abstract financial tool into a lifeline for households facing recurring environmental stress.
The Mozambican model offers lessons for the wider continent. Similar ADRiFi-backed frameworks have been implemented in Malawi, Niger, and The Gambia, each adapting parametric insurance to local climatic realities. In Niger, for instance, payouts in 2023 supported 250,000 farmers following a severe rainfall deficit, while in Malawi, early insurance activation prevented major food insecurity during a regional drought. These cases reflect how data-driven insurance is becoming a cornerstone of African climate finance architecture.
Globally, the ADRiFi programme positions Africa as a leader in sovereign climate risk financing. While Latin America and parts of Asia have experimented with parametric insurance, Africa’s coordinated approach, anchored by AfDB and implemented through ARC, has achieved the largest regional footprint to date.
This progress is particularly significant given the continent’s vulnerability: Africa contributes less than 4% of global greenhouse gas emissions but faces disproportionate exposure to climate shocks.
The broader implications for sustainability are profound. By embedding risk insurance into public finance systems, African nations can reduce dependence on humanitarian aid and emergency loans. This fiscal predictability strengthens long-term planning for climate adaptation, infrastructure investment, and agricultural resilience. As Ambassador Elsbeth Akkerman of the Netherlands observed, “African ownership of climate insurance is what makes ADRiFi work, it transforms vulnerability into agency.”
For Mozambique, the continued partnership under ADRiFi complements its national Disaster Risk Management Strategy (2021–2030), which prioritizes resilience in agriculture and rural livelihoods. It also aligns with the African Union’s Climate Change and Resilient Development Strategy (2022–2032), which calls for a continent-wide expansion of sovereign climate risk mechanisms.
Comparatively, Kenya’s national crop insurance scheme and Ethiopia’s Productive Safety Net Programme demonstrate parallel advances in climate risk protection. Kenya’s initiative now insures over 1.3 million pastoralists, while Ethiopia’s model integrates satellite-based rainfall data to trigger assistance before droughts deepen. Together with ADRiFi, these initiatives form a network of African-led innovations redefining how governments respond to climate volatility.
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Anthony Mothae Maruping, Chairperson of ARC’s Board, framed Mozambique’s renewed participation as a continental signal: “When Africa leads with foresight and unity, Africa wins.” His remarks capture the strategic importance of African nations financing their resilience, not as a humanitarian necessity, but as an economic imperative.
As climate pressures intensify, programmes like ADRiFi represent not just insurance against disaster but an investment in sovereignty and sustainability. Mozambique’s latest $2 million premium, modest in value but monumental in meaning, embodies Africa’s growing capacity to anticipate rather than absorb the shocks of a changing climate, and to do so through mechanisms designed and led by Africans themselves.
