…as ARC pays out M48 million to support drought-hit communities
Moroke Sekoboto
OVER 27,000 vulnerable families across the country that are struggling to feed themselves due to the ongoing drought are set to receive financial aid of M1500 each.
This follows the African Risk Capacity (ARC) Group’s issuance of a US$2,767,958 (approximately M48 million) insurance payout to Lesotho, triggered by the activation of the country’s sovereign drought insurance policy for the 2024/25 agricultural season.
The official handover of the funds is scheduled for tomorrow at Avani Maseru, with the presence of Minister in the Prime Minister’s Office Limpho Tau, Minister of Finance and Development Planning Retšelistsoe Matlanyane, ARC Group Board Chairperson Dr Mothae Mruping, ARC representatives, and development partners.
According to the Disaster Management Authority (DMA), this marks Lesotho’s first participation in the ARC Risk Pool, demonstrating the country’s commitment to proactive disaster risk financing and climate resilience.
In a statement released this week, DMA confirmed that the payout will fund the country’s Final Implementation Plan (FIP), providing emergency food aid and cash transfers to households affected by the drought.
“Lesotho, which chaired the ARC Conference of the Parties from April 2024 to April 2025, has been a strong advocate for climate resilience and disaster risk financing. The two drought insurance policies (covering crop and rangeland losses) for this season were funded through the African Disaster Risk Financing (ADRiFi) programme, a collaboration between the African Development Bank (AfDB) and ARC, with premium support from the German Development Bank, KfW,” the statement said.
DMA further explained that ARC is more than just an insurance provider. Its work includes capacity building, helping member states profile and model their risks, and develop contingency plans.
“ARC’s mechanism enables early action, providing immediate funds when climate disasters strike and avoiding delays in humanitarian response. Lesotho’s participation reflects national leadership and foresight in addressing climate risk through innovative financing and preparedness measures.
“The payout will support drought-affected households across all 10 districts of Lesotho, providing each with M1500 (about US$81), as determined by the Lesotho Vulnerability Assessment Committee (LVAC).
“The assistance will reach 27,638 households, averaging four members per household. Of the funds, 90 percent will target farming families affected by crop failure, while the remaining 10 percent will expand social cash transfers for ultra-poor, labour-constrained households.”
DMA emphasised that partnerships are central to resilience.
“ARC works hand in hand with member states to design solutions tailored to their unique climate challenges. Climate shocks are increasing, and investing in preparedness today reduces loss, suffering, and recovery costs tomorrow.
“This achievement is a testament to strong collaboration between ARC, member states, and development partners. In Lesotho’s case, participation was made possible through the AfDB-ARC joint initiative under the African Disaster Risk Financing programme, alongside premium support from KfW.”
