18 Nov 2019

A two-day dialogue on insurance development in eastern and southern Africa organised by African Development Bank (AFDB) is scheduled to commence in Gaborone today.

“The dialogue will focus on the development of insurance markets for infrastructure, SMEs, agriculture and will also include cross cutting aspects such as digital technologies which will be held in Gaborone on the 19-20 November 2019,” says an Insurance Institute of Botswana press release.

It says the dialogue is held in partnership with Making Finance Work for Africa (MFW4A) and Deutsche Gesellschat Fur Internationale Zusammenarbeit (GIZ) GmbH building on a long-standing partnership among the three organisations on developing and deepening inclusive insurance markets in Africa.

It says several initiatives such as the G20 Compact with Africa (CwA) recognise the critical role that infrastructure such as power, water, sanitation and roads plays in African countries in promoting investment and private enterprise-led growth.

Lack of long-term financing due to investors’ perception of high risk is a key obstacle for investments in infrastructure especially since adequate risk insurance is not available. Insurance can therefore unlock financing and private investments in infrastructure because it is a catalyst for access to credit and markets for MSMEs and therefore contributes to job creation.

“Insurance also protects livelihoods especially of poorer households through guaranteed pay-outs following shocks. However, African insurance markets outside South Africa are underdeveloped,” says the statement.

The statement notes that rural and poor households, farmers and MSMEs do not have access to insurance.

“Obstacles on the demand side are lack of awareness and insurance illiteracy, the supply side including inadequate products and business models and unfavourable framework conditions such as weak regulatory regimes hamper the emergence and growth of insurance business,” says the release.

It says the dialogue will enable public authorities, private actors as well as development partners, to discuss progress on ongoing reforms and priorities as well as future actions aimed at accelerating the development of insurance in the development of insurance in eastern and southern Africa.

“Constraints that prevent the insurance sector from fully playing its role as a catalyst for growth, and in supporting economic and social development objectives, both at the national and regional levels will be addressed,” the release says. Ends