The State Department for Livestock Development (SDLD) has partnered with ZEP-RE (PTA Reinsurance Company), Kenya Development Corporation (KDC) and the World Bank Group (WBG), to launch the De-Risking, Inclusion and Value Enhancement of pastoral economies (DRIVE) project.
The DRIVE project aims to de-risk pastoral systems at the primary level through an integrated package of financial services that includes drought index insurance, savings, digital accounts and financial education, and at the value chain level through de-risking private sector investments that provide reliable markets to pastoralists.
As part of the Horn of Africa Initiative, the DRIVE project will build the resilience of pastoral communities in Kenya, Ethiopia, Somalia and Djibouti. Over 250,000 households are expected to benefit from the project representing 1.6 million pastoralists and their dependents across the four countries over a five-year period.
In Kenya, over 150,000 pastoralists are expected to benefit from the project across the Arid and Semi-Arid Lands (ASALs). The project is also expected to create markets around the livestock value chain, enhance regional cooperation and peacebuilding, climate mitigation (improvement, fodder conservation and increased productivity), and closing the gender gap in access to financial services.
In Kenya, the project has two components. Component 1 involves de-risking pastoral production through a package of financial services. This component aims to protect pastoralists against recurring drought shocks with a package of financial services, including drought index insurance, savings for resilience, digital accounts and financial education and awareness creation. ZEP-RE (PTA Reinsurance Company), the regional implementing agent, is delivering through collaboration with the government, development partners and private sector companies. The regional management of this component helps mobilize the private sector and create the scale necessary to transfer the risk of drought to the international insurance market.
Component 2, with a budget of USD 65 Million, aims to ensure that pastoralists get better value for their livestock. It will do so by upgrading standards and equipment to check the conformity of livestock and livestock products to international standards so that Kenya can strive to export meat products with more value rather than live animals, facilitate the regional livestock trade, and de-risk private investment in the livestock value chain that benefit pastoralists with reliable contracts. The implementing agent for Component 2 is through (KDC and SDLD.
The current drought crisis shows that a new approach to responding to drought is needed, one that relies on pre-arranged financing instruments to put money into pastoralists’ pockets at the onset of the drought rather than on assistance after the drought has been declared, which may arrive after the animals have perished.
Principal Secretary for Livestock Development, Harry Kimtai, said the project is expected to have a positive impact on enhancing the climate resilience of pastoral communities, addressing climate change, strengthening commercialization of livestock production, and ensuring the inclusion of the marginalized and vulnerable groups such as women and youth. The DRIVE project is a critical step towards the sustainable development of pastoralist communities in Kenya. By providing them with the necessary support and resources, the project will help increase their resilience and enhance their economic participation while promoting a more sustainable and inclusive economic development model in the country.”
“ZEP-RE is committed to supporting the regional financial inclusion agenda. We are honoured to be the regional implementation partner for the DRIVE project, in partnership with the Government of Kenya and collaborating with the private sector players. ZEP-RE is particularly keen to ensure equity empowerment of pastoral communities by focusing on innovating how women, youth, and people with disability would also access financial services and linkages to markets and trade-related opportunities under component two. We look forward to scaling financial packages that support the resilience of the communities against various shocks,” Hope Murera, Managing Director and CEO, ZEP-RE (PTA Reinsurance Company) said.
Keith Hansen, World Bank Country Director, had this to say, “The project expands access of pastoralists to a package of financial services, so that they may receive insurance payouts in their accounts in case of severe drought and use their savings in case of moderate shocks. It aims to provide pastoralists with reliable livestock markets where they get better value for their livestock by selling more regularly and directly to the livestock processors and exporters. This financial protection against drought frees pastoralists from keeping many animals to protect themselves against drought shocks.
DRIVE will be implemented in 21 ASAL counties of Turkana, Marsabit, Mandera, Wajir, Garissa, Tana River, Isiolo, Samburu, Meru, Tharaka Nithi, Baringo, West Pokot, Narok, Laikipia, Kajiado, Makueni, Kitui, Lamu, Taita Taveta, Kilifi and Kwale and the beneficiaries are Pastoral groups that are sufficiently structured around productive activities.