A regional approach to drought index-insurance in Intergovernmental Authority on Development (IGAD) countries—Operational and technical feasibility assessment

Executive summary This report assesses the operational and technical feasibility of a regional index-based livestock insurance (IBLI) program for pastoralists located in the Intergovernmental Authority on Development (IGAD) region.1 This desk study has been prepared by the International Livestock Research Institute (ILRI) under the Drought Index-insurance for Resilience in the Sahel and Horn of Africa (DIRISHA) research program. The work has been supported by the United Kingdom Foreign, Commonwealth and Development Office (FCDO). The problem Pastoralists are a key population group and economic factor in the Greater Horn of Africa. In the eight IGAD countries, up to one fifth of the total population – or 50 million people – is made up of pastoralists or agro-pastoralists. Their main source of livelihood is the rearing of livestock, mostly in open grazing rangelands in semi-arid areas. In most IGAD countries, livestock contributes more than one third of agricultural gross domestic product (GDP) and in Djibouti and Somalia more than 80% of agricultural GDP. Pastoralism is the main source of meat and milk products in most IGAD countries. However, pastoralists suffer from widespread poverty and are severely exposed and vulnerable to recurrent droughts. Pastoralists belong to the poorest segments of society in the IGAD countries. Their resilience to droughts is low and their exposure high. In severe drought years, millions of head of livestock die from starvation due to depleted forage, diseases and lack of water, pushing millions of people into food insecurity. As severe droughts rise in frequency and severity across the region, pastoralists find themselves in a poverty trap.