In January 2012, the ARC commissioned a cost-benefit analysis (CBA) to examine the economic advantages and disadvantages of establishing a risk pooling facility as an early response mechanism to severe drought in sub-Saharan Africa.

Risk pool II, which covers the 2015/2016 rainfall seasons, consists of:

The inaugural risk pool, which covered the 2014/2015 rainfall seasons, consisted of:

Signing of the Letter of Intent between ARC and AfDB

In accordance with Article 14 of the ARC Establishment Agreement, the ARC Agency Governing Board was elected by the Conference of the Parties in Dakar, Senegal on 27 February 2013. The Board is composed of eight members of varying expertise from development economics and risk finance to climate change and food security.

Background

Although their exact timing and magnitude are uncertain, most weather events are predictable. Agricultural production in many parts of Africa is affected by natural climate variability and is likely to be significantly compromised by climate change through the higher incidence of drought, erratic rainfall and damaging high temperatures.