IPEC to support agriculture-Mthuli Ncube
Noah Kupeta
HARARE, The Insurance and Pension Commission (IPEC) is working on a comprehensive raft of measures to support agricultural production with a view to boost macro-economic performance and the country’s gross domestic product, Finance and Economic Development minister, Professor Mthuli Ncube has said.
While presenting the 2020 National Budget Statement in the capital, Harare, Professor Mthuli Ncube highlighted that IPEC should play a key and leading role in support of government’s efforts to increase food security through agriculture.
“Pursuant to the Transitional Stabilisation Programme objective of enhancing agricultural insurance, and in line with the National Financial Inclusion Strategy, IPEC is developing a regulatory framework for weather indexed insurance products.
“It is envisaged that the framework will enhance regulation of weather index-based insurance products in order to build resilience and ensure policy holder protection in the agricultural sector.
“The current financing model for agriculture places an unfair share of the burden to Government, notwithstanding the commercial nature of agriculture warranting enhanced financing support from private players.
“Meanwhile, IPEC is developing a risk-based capital framework, the Zimbabwe Integrated Capital and Risk Project (ZICARP), which will be launched in 2020,” he said.
IPEC Board Chairperson Mr Albert Nduna also recently challenged insurance companies to seriously consider projects of national importance in an effort to complement government efforts of reviving the economy.
In his speech at the just ended 2019 Second Edition of IPEC Media Awards at a local hotel in Harare, Mr Nduna challenged insurance companies to create synergies among themselves and venture into manufacturing and production.
“The insurance and pensions industry has a critical role to play in the achievement of Vision 2030.
“The economic success of any country is hinged on the insurance and pensions industry, given its unparalleled ability to mobilise long-term savings.
“The economic boom in countries such as Hong Kong, Singapore, South Korea and Taiwan commonly referred to as Asian Tigers, is largely attributed to the significant contribution of the insurance and pensions industry.
He went on, “As such, our sector has a critical role to play in the achievement of Vision 2030.
“What we should know is that, it is not the Government that should achieve Vision 2030.
“The only role that Government should play is to share the vision and create an enabling environment for the achievement of that vision;” he said.
The pronouncement by Professor Mthuli Ncube come at a time when research indicate that most farmers do not purchase insurance because of “present bias”, as a result they do not care more about the cost of insurance today than about the income they might lose due to a future crop failure.
Chiredzi South Constituency Member of Parliament Callisto Gwanetsa reiterated the finance minister’s call for IPEC to come up with a comprehensive agricultural insurance products particularly for livestock.
“My constituency is in the lowveld and most hot parts of the country where cattle suffer from heat stress and most farmers would be glad to partner insurance companies to sustain their herds which are the major source of livelihoods.
“They also should create specific products that are tailor made for farmers who are in this marginalised communities.
“The idea would be create sustainable agricultural production, “he said.
Agriculture can be a risky business considering factors such as drought, bad harvest, or dip in crop prices can leave small farmers in developing countries without a stable income throughout the year.
Attempts to mitigate these risks with agricultural insurance have normally been unsuccessful because farmers are reluctant to buy insurance policies.
Analysts canvassed by this publication unanimously agreed that the pronouncement by Professor Mthuli Ncube will see a slight increase in the uptake of insurance policies and products by most farmers.
They however quickly pointed out that there is need for IPEC to rethink its communication strategy; products considering that most if not all farmers are found in rural areas.
As such, IPEC should come up with tailor made products that meet the choices of farmers across the country.
Insurance language is fairly deemed technical and complex hence IPEC is called upon to demystify this myth while also directing insurance companies to package their products in a language that can be easily understood by farmers.
Mr Nduna concurred with this notion calling upon the media to play a significant role in informing and educating society in simpler terms the dynamics of the insurance industry.
“It goes without saying that insurance and pension matters are perceived as complex, for the majority of the people.
“For that reason, it is critical for journalists to unpack the seemingly complex issues for better understanding by the public.
“Given the power of the pen, you play a critical role in shaping public opinion.
“The question is how do you use that power? To build or destroy the insurance and pensions industry?
“I would like to urge you to always report objectively and without prejudice to any stakeholder.
“It is important for the media to educate the public that insurance and saving for retirement are still relevant notwithstanding the challenges relating to the operating environment,” he said.
Agriculture remains the backbone of growth of Zimbabwean economy, and is projected to expand by 5% in 2020, on the back of better expected rainfall and forward planning.
