Four disaster climate events in two months
Due to its geographical position, Madagascar is one of the African countries hardest hit by the impact of climate change. Cyclones batter the island nation up to four times a year. The beginning of 2022 saw Madagascar decimated by a series of extreme weather events. Tropical Storm Ana in January was rapidly followed by four events in February: Cyclone Batsirai, Tropical Storm Cliff around the same time, which was circulating, but thankfully did not make landfall, Tropical Storm Dumako and another, Cyclone Emnati.
Sequence of events
Ana made landfall on 22 January near the south-eastern city of Mananjary, 530km from the capital Antananarivo, leaving 55 people dead and displacing more than 70,000. Tropical Cyclone Batsirai, which made landfall on 5 February, was one of the worst cyclones to hit the country in 30 years. It left 121 people dead and more than 61,500 displaced – including 37,500 children – in central and southern Madagascar. Just 10 days later, Tropical Storm Dumako arrived, leaving another 14 people dead and displacing about 3,000. Cyclone Emnati arrived on the south-eastern side of Madagascar, where Batsirai had been just three weeks earlier. Thousands of people were evacuated, but luckily the cyclone did not cause any casualties or damage.
Counting the cost
The devastation of these cyclones and storms was immense. Over and above the many lives lost, the floods and winds destroyed buildings and infrastructure, and villages and towns were cut off – some were left without electricity or water supply. Many houses, because they are built of earth, were turned into mud during the flooding, often collapsing on people. Social services, such as schools and clinics, were severely damaged or destroyed.
Coming to Madagascar’s aid
Shortly after Tropical Cyclone Batsirai, ARC Ltd. made a payout of USD 10,7 million to enable the country to start rebuilding. Madagascar was the first African country to take up ARC Ltd.’s sovereign parametric cyclone insurance protection, which was launched in 2020. It took out a policy for a premium of USD 2 million, fully co-financed by KfW/BMZ Development Bank and ADRiFi multi-donor trust fund (MDTF), with an aggregate coverage limit of USD 11,7 million.
Barriers to rebuilding
Natural disasters, such as cyclones and drought, put the country continually on the back foot. This leaves its government unable to rebuild properly, depletes its coffers, causes food insecurity and exacerbates poverty. The southern part has been experiencing the worst drought in decades and its 30 million people are facing famine.
Drought cover
Madagascar had previously taken out ARC Ltd. drought insurance, 100% financed by the African Development Bank in 2019/2020. The country received a USD 2,13 million payout in July 2020 to cover anticipated losses to livelihoods due to crop failure in the previous season. A total of 600,000 affected people were helped, and bankruptcy among farmers was prevented. Early interventions of this parametric insurance include unconditional cash transfer and cash-for-work for 15,000 vulnerable households, nutritional support for 2,000 children under five years, and water supply for 84,000 households.
Total ARC Ltd. payouts
At the end of April 2022, ARC Ltd. had paid out USD 797,049 to Madagascar. The drought season is ongoing but on 10 April 2022 a guaranteed payout of USD 0,76 million to Madagascar was confirmed. Madagascar is an early adopter of parametric insurance, recognising that this coverage allows it to respond swiftly on the ground, save lives and have the means to rebuild.