France, IFAD sign financing agreement to assist agric index insurance in West Africa

The Agence Française de Développement (AFD) and the International Fund for Agricultural Development (IFAD), have signed a financing agreement to support the development of agricultural index insurance in West Africa.

The agreement was signed by the Chief Executive Officer of the AFD, Mr Dov Zerah and President of the IFAD Mr Kanayo F. Nwanze on June 4, 2012.

The weather index-based insurance, according to the two institutions, can help secure the income of smallholders who are particularly vulnerable to climate variability.

“It can improve rural livelihoods and reduce food insecurity. One of the aims is also to improve access to credit by lowering the risk of default for financial institutions,” they said in a statement.

It added that the objective of the project is to set up a mechanism for monitoring and managing weather risk through the development and testing of an innovative index-based insurance approach in West Africa.

More specifically, the project aims to put in place adapted technical solutions by using satellite technology to measure the impact of weather shocks on yields.

By Ekow Quandzie