Federal Government Confirms $3.88 Million Drought Insurance Payout to Pastoralists

GOOBJOOG NEWS | MOGADISHU: The federal government of Somalia has confirmed $3.88 million in drought insurance payouts to pastoralist communities under an index-based livestock Takaful programme supported by the Horn of Africa DRIVE initiative.

The payout was triggered after satellite data showed declining vegetation levels across pastoral areas, activating the insurance mechanism designed to provide early financial support before drought conditions worsen.

The scheme is part of the World Bank-supported Horn of Africa De-Risking, Inclusion and Value Enhancement (DRIVE) initiative, which aims to protect livestock-dependent communities through climate-risk insurance.

“This is a fund that came from a Takaful system – contributions paid, risk transferred, data triggered, payout delivered,” said Hope Murera, noting the system helps vulnerable communities access funds before drought becomes catastrophic.

The index-based livestock Takaful product uses satellite vegetation data from Planet Labs to monitor grazing conditions in pastoral regions. When vegetation levels fall below pre-set thresholds, payouts are automatically triggered.

Pastoralists enrol in the scheme during two annual registration periods, with payments delivered through mobile money platforms operated by telecommunications providers.

Officials say the programme is also expanding financial inclusion in remote areas, with many pastoralists opening digital accounts for the first time, most of them held by women.

According to Sonia Plaza, the initiative links policy reforms, financing and digital infrastructure to strengthen resilience among pastoralist communities.

“If this financial product can work here, it can work anywhere,” Plaza said, describing Somalia’s model as the world’s first re-Takaful drought index insurance system.

The government also credited domestic insurers – Baraka Takaful Insurance, Salamstar Insurance and First Somali Takaful Insurance – for helping expand Sharia-compliant insurance products and awareness among pastoral communities.

Somalia is one of the countries most exposed to recurring drought in the Horn of Africa, where millions depend on livestock for their livelihoods. Officials say climate-risk insurance is becoming an increasingly important tool to cushion communities from extreme weather shocks.