Agriculture is the backbone of Africa’s economy, providing livelihoods for millions. Yet, farmers and agribusinesses struggle to secure funding due to the high risks posed by unpredictable weather, market fluctuations, and limited financial protections. Africa has approximately 183 million hectares of cultivated land, with 95% of it dependent on rainfall, making the sector highly vulnerable to climate variability. The World Bank estimates that food demand will increase by 70% by 2050, requiring massive investments in agriculture. However, in Africa, less than 5% of farmland is irrigated, and access to financing remains a major barrier to growth. Without effective risk management solutions, many investors hesitate to support agricultural projects, leaving farmers exposed and food production unstable.

Through this new partnership, ARC Ltd. and IFC will develop insurance solutions that help farmers, financial institutions, and agribusinesses manage these risks. The initiative will support the IFC Africa Inclusive Insurance Program (AIIP) by introducing insurance products that protect farmers from climate shocks and other uncertainties. This will not only reduce financial losses but also encourage more investment in agriculture, leading to increased food production and improved food security across the continent.

The collaboration will focus on several key areas, including identifying priority regions for agricultural insurance, developing tailored insurance products, and working with governments, financial institutions, and AgTech providers to expand access to risk protection. By ensuring that farmers and businesses can recover quickly from losses, this initiative will create a more stable and productive agricultural sector.

“This partnership is an important step in our mission to strengthen Africa’s resilience to climate and financial risks,” said Lesley Ndlovu, CEO of ARC Ltd. “By working with IFC, we can scale up agricultural insurance solutions and provide farmers with the confidence to invest in their future.”

Sérgio Pimenta, IFC Vice President for Africa, highlighted the impact of the initiative: “Agriculture is central to Africa’s economy and food security. Supporting food security and nutrition of the continent is an important priority for IFC in Africa which reflects our commitment to fostering economic development and resilience in the region. With this collaboration, we are creating insurance solutions that will protect farmers and attract the investments needed to drive sustainable growth in agriculture.”

At a time when climate change and global food demand are putting increased pressure on African agriculture, this partnership marks a significant step toward ensuring food security and economic stability. By reducing risks and increasing access to financial protection, ARC Ltd. and IFC are working to build a stronger, more resilient future for African farmers and investors alike.