United Nation’s World Food Programme (WFP)
Dr Elena Tarnavsky, ARC Project Team
African Risk Capacity (ARC)
February - October 2021
Rainfall Analytics, Drought Early Warning, Weather Index-based Insurance, Agro-meteorological Risk, Livelihoods
The African Risk Capacity (ARC) is a Specialized Agency of the African Union that helps African governments to improve their disaster and climate risk management. Through innovative disaster risk pooling and risk transfer, ARC creates a pan-African climate response system that enables countries to manage disaster risk and access rapid financing when disaster strikes, protecting lives and livelihoods. The satellite-based early warning system and software that translates weather risk into drought risk, estimates costs and triggers release of funds to African countries impacted by severe drought events. The early warning system is, however, sensitive to different rainfall data inputs and participating countries regularly customise the parametric insurance product. The customisation process – a key decision-making step – involves detailed analysis of multiple rainfall datasets from different sources and selection of the most representative one over a given country/season.
This project supports the decision-making involved in country customisations of ARC’s parametric drought insurance. Specifically, we will develop a methodology and analytical framework, including necessary data processing and statistical tools and evaluation criteria, that help to establish whether or not a specific satellite-based rainfall set, as selected by an ARC country for its customised drought insurance customisation, is fit-for-purpose in a given country/season. As part of the analysis, multiple satellite-based rainfall datasets will be analysed relative to ground-based observations and to each other, and criteria for fitness to purpose will be identified from a set of country-specific case studies. Additionally, the project will develop a comprehensive and dynamic review of previously published evaluations of the performance of satellite-based rainfall data products from different sources. This work will support ARC’s country customisation process by helping countries in ARC’s insurance pool make an informed decision as to which rainfall dataset is suitable for use in the modelling for parametric drought insurance.
Through the methodological and statistical analysis undertaken here, this project will provide the fundamental blocks for a toolkit for systematic evaluation of multiple satellite-based rainfall datasets, allowing countries in the ARC insurance pool to make informed decisions about the use of rainfall data for parametric drought insurance in a given country. ARC assists over 2M people and has provided over USD 64M in pay-outs for early responses.