Drought is a natural disaster that continues to plague regions around the world; it has happened in the past and we know that it will happen again and again, so the question remains, “Are we doing enough?”

In recent years there have been droughts in various regions, some of which have killed thousands and others which have not; the question is “why?”

The answer to that question is that these effects are preventable if money is invested. The problem though, it that money needs to be invested at the right time.

During a devastating drought in Somalia in 1992, an estimated 220,000 people died; in another more recent drought that ravaged the land between 2010 and 2012, affecting more than 13 million people across the Horn of Africa, close to 260,000 people died, half of them children under the age of five.

In contrast to this, Senegal experienced a considerable drought in 2014, but Senegalese children did not die of starvation. Few actually knew anything about the drought, because Senegal, Mauritania, Niger, and Kenya had previously taken precautions against further droughts by leading the way in the creation of African Risk Capacity (ARC), a mutual insurance company into which they pooled resources.

Catastrophe Risk Pools such as this have become quite popular over the past decade or so because they have proven to protect vulnerable populations and national budgets in case of extreme weather events. To date, 26 countries in Africa, the Caribbean, and Central America have used these kinds of risk pools because they are able to assess losses and trigger payouts earlier than traditional response systems.

In 2015, ARC paid out in excess of $26m after lack of rains in the Sahel region just south of the Sahara Desert, which was used to distribute food assistance to 750,000 people, and subsidised food for their livestock to 87,000 livestock herders. Last year the Caribbean version paid out almost $30m to countries hit by Hurricane Matthew.

Investing money in a risk pool offers a targeted, effective and sustainable way to address the impacts of climate change or natural disasters; the fast distribution of the payouts means that human lives as well as those of a country’s livestock are protected.

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