GIIF Launched Index Agricultural Insurance Project in Cameroon

GIIF Launched Index Agricultural Insurance Project in Cameroon

GIIF signed grant agreements with two Cameroonian insurance companies, ACTIVA Assurance and AXA Cameroon, to help tens of thousands of Cameroonian farmers and pastoralists, especially in the cotton, maize, sorghum and livestock sectors, acquire affordable insurance coverage.

Both IFC partner insurance companies have already established strong relationships with cotton industry players - SODECOTON and the National Confederation of Cameroon Cotton Producers (CNPCC) - and have provided index insurance to nearly 8,000 cotton growers in the Northern region of the country for the 2019 campaign.

To formalize the start of activities for the agricultural index insurance project in Cameroon and the partnership between ACTIVA and AXA Cameroon on the one hand, and CNPCC on the other hand, on Friday August 2, 2019 the Government of Cameroon, through the Ministry of Agriculture and Rural Development (MINADER), organized an official launching ceremony at the Hilton Hotel in Yaoundé which was chaired by Clementine Ananga Messina, the Deputy Minister of the Ministry of Agriculture and Rural Development.

According to Clémentine Ananga Messina, Deputy Minister of the Ministry of Agriculture and Rural Development, “index insurance has many advantages, including income stabilization, for farmers who become less dependent on climate conditions, or improving access to funding since climate insurance can secure seasonal loans or purchase of inputs”.

The goal of IFC and its partners is to issue more than 135,000 agricultural index insurance contracts by the end of 2020, which will enable about 700,000 farm households to cover their farms, access inputs and offset yield reductions in the event of a disaster.
Index-based agricultural insurance uses objective and transparent parameters such as the level of rainfall and does not require expensive field visits to verify losses. It is an innovative and effective way for farmers to protect themselves against the vagaries of the climate. This product contributes to improving productivity in the agricultural sector, which is essential for the Cameroonian economy as it accounts for 20% of the country's GDP and employs 54% of the labor force.

Fatou Assah, head of the GIIF program and representing IFC's Country Representative in Cameroon said: “It is undeniable today that index insurance influences the way we approach resilience and climate change. This is particularly true for Cameroon, where agriculture is still vulnerable to climate shocks. It is therefore with pleasure that IFC will contribute to the creation of an agricultural index insurance market in Cameroon and help develop the supply and demand actors’ capacities in index agricultural insurance.”

As part of this 2-year pilot project, insurance companies will provide specialized teams to participate in capacity building activities, develop additional agricultural insurance products, and distribute these products to farmers and herders, particularly in the cotton, maize, sorghum and livestock sectors, through intermediaries such as umbrella organizations of producers' associations, cooperatives, agricultural input suppliers, commercial banks and other microfinance institutions.