Climate impacts on the front line: lessons from the DIRISHA project for pre-prepared finance
by Jonathon Gascoigne, Lead Risk Finance Specialist
In the African drylands of the Sahel region and Horn of Africa, the climate crisis exacts a punishing toll. Drought and food insecurity challenges, landscape modification and settlement expansions have been compounded by the pandemic – and socioeconomic development is threatened. Amongst those worst affected by climate change are pastoralists, who rely on herding livestock across Africa’s arid and semi-arid lands for their livelihoods.
Across Africa, the livestock sector supports the livelihoods of around 350 million people, one-third of continental population, and contributes between 30 and 50% of agricultural GDP. Changing rainfall patterns and heat stress will impact pastoralists the most; those who rely on herding livestock across arid and semi-arid lands for their livelihoods. In Kenya, the extended 2008-2011 drought reduced the economy by US$12.1 billion, with the livestock sector representing 72% of this loss. Household welfare was severely affected, progressing to a major humanitarian emergency with heightened malnutrition, particularly in children.
‘Drought is a huge recurring problem for many pastoralists… in northern Kenya, drought-related starvation is the leading cause of livestock deaths – more than 50 per cent of animals die this way.’
Not only is drought the greatest source of livestock death, it affects grain production, increasing food prices leading to malnutrition, and also contributes to soil erosion – but its effects have even further-reaching implications. As usable farmland diminishes, conflict between farmers and herders increases as herders need to move their livestock around grazing grounds, and decreasing crop yields require greater areas to be converted to arable.
The DIRISHA project
Anticipatory action was a big conversation piece at this years’ COP, and is increasingly promoted as a key part of climate adaptation strategy in low-income economies. It is based on the idea of seizing a critical window of opportunity ahead of a disaster by deploying pre-arranged finance for cash transfers or other essential services to mitigate its impacts, an approach which is widely supported by humanitarian actors as a means to stop disasters turning into crises. The DIRISHA project (Drought Index-insurance for Resilience in the Sahel and Horn of Africa) – Swahili for ‘window’ – is an analysis of how such anticipatory initiatives are making a practical difference to a very real difficulty faced by millions of pastoralists battling the impacts of climate change, based on over 10 years of implementation.
Index-based livestock insurance (IBLI) programmes are an innovative form of insurance that will pay out based on satellite-based triggers. The triggers use an assessment of climatic conditions, such as measure for rainfall or distribution of pasture availability, over a season. This approach provides resources to help herders’ animals survive periods of sustained crises – protecting the investment (and therefore, livelihood) rather than reimbursing a herder after the death of their stock. Originally, IBLI was conceived as a commercial microinsurance product – but over time it has been integrated into national-level subsidised schemes, to provide social protection for many.
Funded by the FCDO, and undertaken by International Livestock Research Institute (ILRI) in collaboration with the Centre for Disaster Protection and the African Development Bank, the DIRISHA project was designed to take stock of lessons learned from different IBLI schemes, and assess the potential for an IGAD[1]-wide approach to scale-up. Operational activities over the last ten years are now being published, providing robust evidence that IBLI is a valuable instrument for building drought resilience for pastoralists, as well as a wealth of policy and technical information from eight countries in the IGAD region, and highlighting fundamental recommendations and challenges for considering disaster risk finance as an effective climate change adaptation strategy.
Disaster risk financing in action
DIRISHA demonstrates that anticipatory actions as disaster risk finance can and should be used as a policy tool for improved climate crises management, as part of an integrated approach. For pastoralists, financial resilience must be linked to socio-ecological system resilience – effective rangeland management is dependent upon healthy and functional communities, economies, cultures and landscape.
Livestock insurance schemes, in a variety of structures, can significantly strengthen the scope and quality of drought management, supporting a multilayered strategy that includes early warning systems and safety net programmes. A key evolution has been early payouts immediately after the end of the rainy season that allows ‘asset protection’ over ‘asset replacement’: funds for early coping and mitigation strategies such as purchasing fodder, water or veterinary services. In contrast, conventional humanitarian relief assistance can take nine months to reach intended beneficiaries.
For example, the Kenya Livestock Insurance Program (KLIP) offers fully government-subsidised IBLI coverage for targeted households and has expanded rapidly to include 18,000 pastoral households, representing over 80,000 beneficiaries. Evidence from KLIP suggests that IBLI is of most benefit as for pastoralists who are vulnerable (20–30 tropical livestock units - TLU[2]) and in danger of falling into poverty (10–20 TLU), equivalent to 47% of the pastoral population. Survey respondents after drought events reported using payouts for a mix of livestock expenses and human food purchase.
The broader portfolio of coping options that IBLI allows scheme participants also offers the possibility of reducing conflicts over scarce forage resources. Applying IBLI approaches regionally, as the DIRISHA research explores, could reduce tensions by stimulating countries to identify mechanisms to address cross-border migration challenges.
Looking ahead
In the wake of COP26, DRF findings such as those of the DIRISHA project cannot be ignored. The increasing frequency and intensity of droughts in the African region mean that the learnings from DIRISHA must be applied to ensure IBLI and other risk-based financing approaches can be rolled out at scale. Already, meteorological forecasts for further drought in March-May 2022 in the region are sounding the alarm, for those willing to hear.
As proposed by the Crisis Lookout coalition, a group of local-global experts committed to changing how the world pays for disasters, and convened by the Centre for Disaster protection, now is the time for world leaders to put disaster risk at the heart of all climate preparedness and response financing.
DIRISHA reports can be accessed here.
[1] Intergovernmental Authority on Development: Djibouti, Eritrea, Ethiopia, Kenya, Somalia, South Sudan, Sudan and Uganda
[2] 5 tropical livestock units (TLU) are equivalent to 5 cattle, or 50 goats/sheep or 1 camel and 4 goats.