A new highway in Kenya enhances transportation and economic growth in Africa.
By Hope Murera, Managing Director and Group CEO, ZEP-RE (PTA Reinsurance Company)
Africa’s public infrastructure carries risks that no single national budget can absorb. A regional pool, built on sound foundations, can share that burden, and keep development on course.
The October-December rains have arrived under strengthening El Niño conditions, bringing a wetter-than-normal season and elevated flood risk across much of the Greater Horn of Africa. Parts of Southern Africa face the opposite risk: below-normal rainfall, with consequences for agriculture, water supply and, in Zambia, hydropower. A single climate event will test public finances on both sides of the region within the same year.
The cost falls heavily on public infrastructure. Roads, bridges, hospitals, power systems, and water networks take years to finance and build and can be lost in a single season. Rebuilding then means diverting budgets from new investment or borrowing at short notice on less favourable terms. In either case, development is set back.
Reserves alone are rarely sufficient, and individual cover against severe events is expensive. Regional risk pooling offers a way to share that burden.
Why a pool, and why its composition matters
A pool brings the risks of several countries together so that the capital needed to protect them is shared. Because severe losses do not fall on every participant in the same year, a pool requires less capital in total than each country would need independently. Its scale also improves access to international reinsurance and the terms on which it is obtained.
That benefit depends on how the pool is composed. The present El Niño illustrates why. Flooding in East Africa and drought in Southern Africa are different perils, but they share a common climate driver and can produce losses in the same year. A pool that treated them as independent would overstate its own capacity. A well-designed pool combines exposures that differ in cause and timing, such as riverine flood, coastal cyclone, and Rift Valley earthquake, and uses market capacity to carry the years in which losses coincide.
A regional pool also complements, rather than replaces, national arrangements. Governments can continue to meet frequent and smaller losses through budget reserves and contingency funds, use contingent credit for moderate events, and transfer the severe and infrequent losses that no single budget can carry. The pool is designed for that last layer, where shared capacity adds the most value.
From commitment to collective action
The policy foundations are in place. In July 2025, insurance supervisors from twelve countries adopted the Zanzibar Declaration on the Financial Protection of Critical Public Infrastructure, committing to promote the insurance of public assets, to embed it in public planning, budgeting and asset management, and to explore regional mechanisms, including pooled risk facilities.
In September 2026, the inaugural CDRFI Africa Forum in Nairobi, attended by delegations from 21 countries, brought Ministries of Finance into that commitment. Participating governments adopted a Call to Action supporting the establishment of a Regional Insurance Risk Pool for Public Assets and Critical Infrastructure, and invited ZEP-RE, as a specialised institution of COMESA, to coordinate its design and establishment with partners, governments, regulators, partners and the insurance market. The Forum also launched a government-led Community of Practice.
ZEP-RE accepts this responsibility with a clear view of what it requires.
What it will take
Knowing what is being protected. Many governments do not yet hold complete and valued registers of their public assets. Without them, risk cannot be priced and cover cannot be placed on sound terms. Supporting countries to identify, value and prioritise critical infrastructure is therefore the starting point, with benefits for maintenance and budgeting, however the risk is financed.
A legal and institutional basis to act across borders. Public asset insurance needs to be provided for budget processes, procurement rules and insurance regulation, and a regional mechanism requires a governance structure that participating governments own and trust. Supervisors and finance ministries each have a part in this.
Capital and partnership to establish the mechanism. Development partners have an significant role in supporting feasibility work, initial capitalisation, and premium financing in the early years, with country ownership increasing over time. The engagement of the World Bank Group, the African Development Bank and others at the Forum shows the breadth of support available.
Delivery. A pool is ultimately judged by whether it pays the right amount, promptly, when a covered event occurs. That depends on careful product design, whether parametric cover that pays against pre-agreed triggers or indemnity cover for assessed physical loss, and on arrangements agreed in advance for how payouts will be applied to recovery.
The work ahead
The Call to Action sets out the immediate priorities: national focal institutions, public asset protection roadmaps, priority infrastructure portfolios for pilot insurance, and coordinated financing and risk-pooling mechanisms across COMESA and beyond. ZEP-RE will take this work forward with participating governments and partners, beginning with those countries ready to proceed.
Africa will continue to face climate shocks. Whether those shocks also reverse years of development depends on decisions taken before they occur. A regional pool for critical infrastructure is among the most practical of those decisions, and the commitment made in Nairobi gives the region a sound basis to take it.
ZEP-RE co-convened the inaugural CDRFI Africa Forum in Nairobi in September 2026.
Contributed articles reflect the views of their authors, not Africa.com.