Harare, Zimbabwe, February 15, 2022—IFC and Zimbabwe's insurance regulator, the Insurance and Pensions Commission (IPEC), today announced a partnership to create a market for agricultural insurance products in Zimbabwe to protect smallholder farmers from weather-related crop damage and other shocks.
Through the partnership, IFC will assess the risks smallholder farmers face, how they are coping with those risks, and will gauge the farmers' appetite for agricultural insurance to protect their livelihoods. IFC will also help IPEC develop a regulatory framework and enabling environment for agricultural insurance and determine the features of insurance products appropriate for Zimbabwe's farmers.
Additionally, IFC will facilitate knowledge exchanges to help Zimbabwe's insurance providers learn best practices from more developed agri-insurance markets.
Agriculture is a significant contributor to Zimbabwe's economy, employing almost two-thirds of the country's working population and contributing about eight percent to GDP. However, there are currently limited insurance products in the country specifically designed to protect smallholder farmers.
"One of our key roles as the regulator is to develop the insurance sector in Zimbabwe," said IPEC Commissioner, Grace Muradzikwa. "This partnership has, therefore, come at an opportune time given that the country is prone to climate change-related risks, including extreme weather events such as drought, floods, heavy rainfall and heat waves."
"Agriculture is central to Zimbabwe's economy, but it is a risky endeavor that is becoming riskier as weather patterns become less predictable," said Adamou Labara, IFC's Country Manager for Zimbabwe. "IFC's partnership with IPEC will reduce the risks for Zimbabwe's farmers by developing the foundation of agriculture insurance in the country. Supporting the agribusiness sector is an important part of IFC's strategy to promote private sector growth across Africa."
The Zimbabwe project will draw on the experience of the Global Index Insurance Facility (GIIF), through which IFC has supported the growth of agriculture/climate insurance markets in Cameroon, Cote d'Ivoire, Mozambique, Nigeria, Senegal, Zambia, and elsewhere.
GIIF is a multi-donor program managed by the World Bank Group. It was created to address the scarcity of affordable insurance protection against weather and catastrophic risks in emerging countries.
IPEC develops agricultural insurance solutions that promote sustainable agriculture practices and benefit Zimbabwe's smallholder farmers. By increasing the penetration of agriculture insurance, IPEC expects the new program to speed up the adoption of more resilient and sustainable agriculture practices and boost livelihoods and food security.
IFC's Advisory Services programs in Zimbabwe are also helping to strengthen the country's tourism, digital financial services and SME financial services sectors.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
About IPEC
IPEC is a statutory body that was established in terms of the Insurance and Pensions Commission Act [Chapter 24:21] with the mandate of regulating the insurance and pensions industry. One of the Commission's key mandates is to develop the insurance and pensions industry. For more information, visit www.ipec.co.zw.
