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If Poverty Is The Problem, Insurance Is The Solution

The year was 1993.

The year a terrorist attack on United States of America’s World Trade Centre by Ahmad Ajaj, Ramzi Ahmed Yousef and others killed six people on February 26 and left over a thousand injured.

Lovejoy Mutongwiza

It was the same year the world witnessed the despicable Candelaria child massacre, a mass killing in Rio de Janeiro, Brazil, on July 23.

Who can forget 1993, the year Bill Clinton strolled into the White House as USA’s 42nd president.

In Africa, 1993 is best remembered for the noxious famine that ravaged the north eastern African nation of Sudan.

A famine so heartless it exterminated both young and old leaving the third largest African country by area with nothing but an avalanche of tears.

Tear-jerking, graphic images of hunger-struck women and children reduced to mere collection of bones by the drought flooded global media drawing sympathy from all and sundry.

However, narratives of the Sudanese dearth are incomplete without mention of a sad photograph taken by late South African photojournalist Kevin Carter.

The controversial image captured by Carter had a large vulture, shoulders hunched in its grotesque undertaker mannerism patiently waiting for its prey.

A harbinger of inevitable death, its patience was not borne out of anything but certainty that it will get its meal.

But the setting was not in the Savanna and on the menu was not a wild beast but an emaciated figure of a young girl hanging by a thread obstinately to life struggles to maintain some sign of activity for any appearance of death will bring the vulture’s claw and beak on her.

She was not a beast but a small child starved to the very porch of death, all that was left of her was a swollen head and powerless limbs that could not hold it up or move it to safety and on the sidelines was a vulture waiting to devour her if she dies before she could make it the food distribution centre a few metres away.

No one knows what happened to her.

Such are the effects of hunger and poverty on mankind.

Unfortunately, the sad tales of hunger and poverty witnessed in Sudan during that time continue to be replayed in many countries across the globe.

Poverty and hunger, the unrelenting Siamese twins have wreaked havoc in Africa since time immemorial.

The Food and Agricultural Organisation’s 2017 statistics noted that approximately 27.4 percent of the population in Africa is severely food insecure which is almost four times as high as any other region.

An October 2018 World Bank report titled Poverty and Shared Prosperity :Piecing Together the Poverty Puzzle stated that the average poverty rate for sub Saharan Africa stands at 41 percent and of the world’s 28 poorest countries, 27 are in sub Saharan Africa, all with a poverty rate above 30 percent.

The World Bank defines extreme poverty as living on less than US$1.90 per day as of October 2015.

Zimbabwe has not been spared.

Poverty headcount ratio at national poverty line (% of population) in Zimbabwe was reported at 72.3 % in 2011.

National poverty rate is the percentage of the population living below the national poverty line.

Statistics have shown that the majority of those affected by poverty in the country are those living in rural and marginalised communities who are struggling to irk a living in an unforgiving and inflationary environment.

A preponderant number survive on menial jobs that only allow them to live from hand to mouth and in the event that these jobs are no longer available, the deadly and unforgiving claws of poverty will rip them apart.

Some of them sorely rely on tobacco farming like but because of this year’s poor rainfall they have been affected.

Fortune Nyathi, a Karoi tobacco farmer based in Chipapa said they experienced probably the worst drought in Karoi in 25 years and their source of livelihood has been affected.

“Our crop was affected by poor rains and we are now selling it for about 0.80 cents a kg while previously we sold it at around $4.50 a kg. This money will not sustain us and by year end we will be languishing in poverty,” he said.

Farmers in other areas like Chiufe and Kajekache face the same fate together with many other farmers across the country whose crops have been affected by poor rainfall.

Upon been queried about his knowledge pertaining to insurance issues and how it could have helped him under such circumstances, Nyathi laughed it off quipping that insurance is not meant for people like him and his peers in the rural areas.

“Insurance is for you urbanites” bantered Nyathi. “It is too elitist for our liking and is very expensive. I might be ignorant of the actual charges but I am certain they are exorbitant,” he said.

This commonly held view by many rural dwellers has contributed to a generally low uptake of insurance packages and partly explains the high poverty levels witnessed in some parts of these societies.

The Insurance and Pensions Commission (IPEC), a statutory body established to regulate the insurance and pensions industry launched the Microinsurance framework in 2017 to facilitate access to affordable and simple insurance products for low income earners and for those with irregular income.

“The framework is informed by our understanding that people with low income and those with irregular incomes should be able to take appropriate risk protection through micro insurance products, said IPEC, Public Relations Manager, Lloyd Gumbo.

Added Gumbo: “Some of our regulated entities are already selling Microinsurance products like funeral and agriculture. We encourage uptake of these products because we believe that insurance is more important for the poor because it helps them quickly recover as compared to the affluent in society.”

IPEC’s actions are in line with Sustainable Development Goal (SDG) number 1 and 2 which deal with eradication of hunger and poverty alleviation.

SDGs are a set of development goals rolled out by the UN in 2015.

IPEC’s activities are also in line with section 77 (b) of the Constitution which provides that: “Every person has the right to sufficient food and the State must take reasonable legislative and other measures , within the limits of the resources available to it…”

Organisations like Life Offices Association and Zimbabwe Association of Funeral Assurers (ZAFA) are helping rural and marginalised communities fight poverty and hunger by offering affordable insurance packages.

“Premiums are charged in line with the incomes of those targeted and the terms are normally flexible. For example, conventionally, premiums were paid on a monthly basis but people in rural areas do not get money regularly so there are allowed to make payments when they get the funds maybe after selling their produce,” said ZAFA general manager, Takaindisa Svosve.

Responding to the issue of pricing, Svosve noted that depending with the package, some premiums are pegged at as low as RTGS1.00 making them reasonably priced for rural dwellers.

Insurance provision to the poor is not restricted to Zimbabwe.

A study carried out by Stefan Dercon, Tessa Bold and Cesar Calvo in Latin America and Caribbean countries titled Insurance for the poor? contended that uninsured risk has substantial welfare costs not just in the short run, but also in terms of perpetuating poverty.

The scholars noted that: “Insurance provision to the poor could play an important role in a comprehensive system of protection against risk, including other ex-ante measures such as promoting credit and savings as insurance, as well as a credible overall expost safety net.

In the words of renowned Greek philosopher, Aristotle, poverty is the parent of revolution and crime. The late Kofi Annan, seventh secretary general of the UN notes that: “Extreme poverty anywhere is a threat to human security everywhere,” while Mahatma Gandhi, the late Indian political leader and philosopher noted that: “Poverty is the worst form of violence.”

It can however be argued that if poverty is the problem, insurance is the solution.


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