Published 2016
African Risk Capacity: An Innovative Financing Mechanism for Natural Disasters,
By Mohamed Beavogui

While uncertain in their exact timing and magnitude, natural disasters are becoming increasingly predictable using available technologies and data to monitor and estimate the level of potential risk. In 2014, the estimated cost of natural disasters was US$ 110 billion70, putting fiscal strain on governments and their partners and leaving vulnerable households in dire need. In order to maximise its value to the world’s most vulnerable populations, the international aid community must endeavour to utilise available technologies to create an effective and equitable international emergency aid system. This requires a shift from a reactive emergency aid business model to a proactive risk management investment model. It is on this premise that the African Risk Capacity (ARC) was created as an innovative financing solution to natural disaster response.