There is a growing consensus that insurance, risk transfer, and sharing mechanisms have an important and growing role to play, particularly in offsetting the economic impacts associated with extreme events. What is less clear is the extent to which such instruments encourage adaptation programmes and policies that would serve to minimise future loss and damage and, hence, contribute to sustainable development. This paper does not pretend to offer answers, but rather contributes to the emerging discussion and brings to that discussion a water lens.

GWP has been implementing the Water, Climate and Development Program for Africa (WACDEP) as part of the work plan of the African Union’s African Ministerial Council on Water (AMCOW). The First Phase of WACDEP has been implemented in 8 countries and 5 transboundary basins in Africa. AMCOW, during the Africa Water Week in July 2016 in Tanzania, endorsed WACDEP to be expanded to additional 10 countries. Kenya is one of the countries selected for the second phase of WACDEP.

Across West and Central Africa, surface temperatures have increased significantly over the last 50 years. The primary impacts of climate change are mostly felt through water. Climate-related events such as droughts and flooding are already having a significant and diverse impact across the region, exacerbating existing challenges such as rapid population growth, extreme poverty, water shortages, rapid urbanisation and conflict.

Water insecurity costs the global economy roughly US$ 500 billion annually and causes the death and displacement of more people than cyclones, floods and earthquakes combined. In particularly vulnerable economies, a 50% reduction in drought effects could lead to a 20% increase in per capita GDP over a period of 30 years. Therefore, mechanisms to enhance integrated drought management are more critical than ever.

Introduction