News Africa07 Nov 2024

South Africa:Govt looks into acquiring climate-related disaster insurance

| 07 Nov 2024

The South African government is exploring options for purchasing insurance for certain climate-related disaster events, where such a practice would not undermine Budget sustainability.

Tabling the 2024 Medium-Term Budget Policy Statement (MTBPS) in Parliament last month, Finance Minister Enoch Godongwana said climate-related disasters have intensified, damaging infrastructure and disrupting life, according to a report by the South African Government News Agency.

The National Treasury’s document on the 2024 MTBPS indicates that methods previously developed by the public and private sectors to manage disaster response and recovery are becoming unrealistic in terms of cost.

Mr Godongwana said, “National Treasury is undertaking a detailed analysis of the experience of local governments regarding their access to emergency financing and their ability to disburse it.

This analysis will help us better understand their capacity to manage a multi-layered, disaster risk finance approach.

It will look into the willingness of municipalities to independently manage their financial response to disasters, existing incentives to invest in readiness, and their ability to set aside sufficient funds for their response.”

He said the recommendations of the disaster risk financing strategy will be implemented, starting in 2025, to improve readiness and response time.

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