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Independent evaluation of the African Risk Capacity

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Debbie Hillier

Ashira Perera Felicity Le Quesne Marcela Tarazona Michele Binci A0603 Africa Debbie Hillier Patrick Ward Donna Harris disaster insurance Stephen Jones

In order to maximise learning and effectiveness, the Foreign, Commonwealth & Development Office (FCDO) has commissioned us to complete an Independent Evaluation of the African Risk Capacity. ARC is an innovative African Union initiative which combines the concepts of early warning, disaster risk management, and risk finance, to create an African-owned disaster response system across the continent that enables African governments to better meet the needs of people at risk of disasters. Launched in 2012, ARC has initially focused on providing insurance for drought, and is now expanding into other extreme weather events and disease outbreaks.

The evaluation has a ten year timescale (2015-2024) to allow for the study of developments in ARC as an organisation, the uptake of ARC products and services over time, and ultimately in the impact ARC is able to have on reducing vulnerability to disasters across Africa.

Challenges

The frequency and severity of disasters globally, and drought in Africa specifically, is intensifying. Against this backdrop, African governments require support in their disaster risk planning and financing in order to ensure that timely support reaches affected populations before they have to engage in negative coping strategies, such as the sale of assets.

The African Risk Capacity is an African-owned, index-based weather risk insurance pool and early response mechanism. Through a pooled insurance model, ARC intends to offer African countries competitive pricing for insurance products. ARC is unique amongst the regional risk pools in requiring countries to have effective contingency plans before agreeing to provide insurance, and in assessing the impact of each payout, and thus has huge potential to improve the ability of governments to better anticipate, plan, and respond to disaster risk by strengthening capacities, awareness, and action around DRM. And at the local level, the expected impact is that vulnerable households should be more resilient to disasters through the receipt of timely support.

Our evaluation will support lesson learning in this important and improvements in effectiveness which will have direct impacts on ARC as well as the broader disaster risk financing sector, including other regional risk pools.

Our approach

The focus of the evaluation is on ARC’s role in enabling a timely response following an extreme climate event such as drought before the livelihood situation of affected households becomes critical.

The evaluation will undertake two formative evaluations, to identify and feed lessons learnt into the management of the ARC programme, and two impact evaluations, to consider where, when, why, and how ARC is, or is not effective.

This is a theory-based evaluation, and uses contribution analysis as our primary analytical framework for evaluating the contextual and programmatic complexities of the ARC initiative. This examines the Theory of Change (ToC) in depth from inputs to outcomes, to establish a plausible contribution to observed changes. Placing the ToC at the centre of the overall design allows us to identify critical shortcomings, not only where ARC may or may not be achieving certain objectives (a critical assessment of performance), but where the ToC itself may or may not be holding (a critical assessment of strategy). These findings are developed around identifying progress that ARC is making towards contributing to desired outcomes and impacts, or challenges to ARC’s progress towards achieving its objectives.

The precise design of each of the five key elements of the evaluation (two formative, two impact, and one pilot impact assessment) will be based on this approach and fine-tuned to fit the particular circumstances, reflecting developments in ARC and country DRM capacity, emerging hazards, and the global disaster risk financing context; all of which are changing.

This mostly qualitative evaluation is expected to include country case studies, organisational reviews, global reviews including perceptions surveys, and a wide range of other analysis to answer the evaluation’s key questions.  

Outcomes

In light of the relatively scarce literature on disaster risk insurance mechanisms and impacts, our evaluation aims to make a significant contribution to global debates and policy on the topic, by offering robust empirical evidence collected from a range of African contexts.

The evaluation will test if risk pooling and transfer is a cost effective way to incentivise contingency planning and ensure rapid responses to drought and other extreme weather events. The evaluation will consider the value of support to contingency planning and early responses in minimising the impact of (and accelerating recovery from) extreme weather events. It will consider where, when, why, and how ARC is, or is not, effective with the aim of contributing to the global evidence base.

In addition, during the early formative phases of the evaluation, the team will identify and feed lessons learnt into the management of the ARC programme. This stage will be focused on considering and strengthening ARC’s effectiveness and performance.

Finally, the evaluation will also be instrumental in providing accountability to the UK taxpayer for FCDO’s significant investment in ARC, demonstrating evidence to inform continued investment in the programme and similar investments for FCDO and other donor agencies.

Areas of expertise