CBN Assures Flood Victims of Insurance Cover

CBN Assures Flood Victims of Insurance Cover

James Emejo in Abuja

Central Bank of Nigeria (CBN) said there was no cause for worry among farmers under its Anchor Borrower Programme (ABP) following the recent devastation of farmlands by flooding in the North-west.

CBN’s Director of Development Finance Department, Mr. Yusuf Yila, who disclosed this over the weekend, said both the apex bank and affected farmers are currently covered by insurance, adding that relevant claims had been settled.

Speaking during the formal launch of the Hybrid Multi-Peril Crop Indemnity-Index Insurance (H-II) by the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) in partnership with Royal Exchange Plc, CBN director commended NIRSAL for facilitating the development of insurance products, which had helped to provide succour to farmers at a critical time.

He submitted that the apex bank had to adopt NIRSAL insurance model for farmers in resolving the crisis caused by the flooding, which ravaged huge expanse of farmlands.

He said: “There is not a lot for me to say around insurance with what has happened in the North-west.
“The reason that makes me sleep in the last week is that the first thing I did was to tell my staff to pay insurance first.

“Though unfortunate, we are not afraid of what has happened in the North-west but at least our farmers and ourselves are covered.”
He also said CBN is currently working on legislation to ensure that ABP and other developmental interventions do continue to run irrespective of the government of the day.

Yila further commended NIRSAL managing for providing leadership and direction and being at the forefront of innovation in the agricultural sector.
However, in furtherance to its mandate to de-risk the agricultural sector, the agriculture risk agency has unveiled a fresh insurance package for smallholder farmers.

The H-II, which was launched in partnership with the foremost insurance firm, Royal Exchange Plc, seeks to protect farmers from farming losses during a particular farming season as well as cover for the life of the farmer in case of permanent disability or death, during the season, thus ensuring the farmer is able to remain in business no matter the loss or situation.

Speaking during the formal launch over the weekend, Managing Director/Chief Executive, NIRSAL, Mr. Aliyu Abdulhameed, described the intervention as yet another milestone in agricultural insurance in the country.
He said the partnership with Royal Exchange puts the interests of Nigerian farmers at the forefront by ensuring they are adequately protected throughout each farming season.
NIRSAL MD pointed out that it’s through such strategic partnerships that the agency had continued to realise its vision of transforming the economy, delivering inclusive growth as well as impact lives.

He described the product as first-of-its-kind, adding that it would protect farmers from “losses during a planting season caused as a result of bad weather in the form of low and high rainfall, early and late-season dry spells, lightning, hailstorms and thunderstorms.”
He stated that 80 per cent of the agricultural sector contribution to the GDP was attributable to smallholder and subsistent farmers who are unfortunately the most vulnerable actors along the value chain.

But he said in addition to finding it difficult to access sustainable financing, Nigerian farmers and their families are often left to contend with the negative effects of many factors including bad weather, pest, disease, fire outbreak, permanent disability and even the death of the farmer.
Abdulhameed said the HM-II was piloted during NIRSAL participation in the 2019 Anchor Borrower Programme (ABP), pointing out that “in a case where the afore-mentioned risks materialise, benefits paid out to the farmer would be up to the maximum loan or the insured amount following the trigger from advanced satellite technology or an assessment by an agriculture expert or both.”

He reiterated NIRSAL’s commitment not to only protect farmers but also contribute to the diversification of the economy to attain self-sufficiency in food production and entrench inclusive economic growth in alignment with the federal government’s Economic Recovery and Growth Plan (ERGP).
He said leveraging on the insurance pillar, NIRSAL aims to increase the distribution of existing and new agricultural insurance products from about 0.5 million farmers in 2017 to 3.6 million farmers nationwide by 2026.

He expressed satisfaction that with six years to spare, the agency had already reached a milestone of 1,476,289 smallholder farmers having subscribed to NIRSAL’s already-developed insurance products in past farming seasons.
Abdulhameed said the NIRSAL Area Yield Index Insurance product (AYII), which is an existing insurance product already guarantees the income of the smallholder farmer by covering expected yield.
He said the AYII was piloted during the 2017 wet season farming to great effect, covering 17,000 farmers and 10,000 hectares with a harvest value of N3 billion.

Also speaking at the unveiling, Commissioner for Insurance/Chief Executive, National Insurance Commission (NAICOM), Mr. Sunday Thomas commended the partnership and foresight between NIRSAL and Royal Exchange to fuse both products that birthed the hybrid product.

He said the management NAICOM and NIRSAL had met earlier in 2017 to address the urgent need for implementation of index-based agriculture insurances to be offered by insurance companies licensed by the commission.

The NAICOM chief executive said the “commission had granted “No Objection” to Royal Exchange General Insurance Company Limited to introduce Multi-Peril Crop Insurance and Weather Index Insurance products in the Nigerian Insurance market.”

Related Articles