Incorporating the views of communities that are often at the bottom of the pyramid, and whose voices are rarely heard in sustainability strategies is key to their success. One such inclusive technology in Kenya is the Index-Based Insurance (IBLI), an innovative tool against drought losses in Kenya that seeks to cushion pastoralist communities from the frequent spates of drought and has changed the lives of hundreds of thousands of pastoralists in the Arid and Semi Arid Lands (ASALS) in the country. This example, provided by Fiona Imbali of Alliance member, the Africa Sustainability Hub, shows how technology and policy working together could be more widely used to enable rapid transition to a zero carbon future.

Institutions the world over are constantly trying out innovations and new technologies that promise to lift populations out of poverty and enhance food security, whilst simultaneously struggling to manage climate change. This is especially true in Africa. While Africa is responsible for only 4 per cent of current global greenhouse-gas emissions, an overwhelming 65 per cent of its population is directly impacted by the ravages of climate change.

A recent Inter-governmental Panel on Climate Change (IPCC) report shows that by 2020 Africa’s agricultural productivity from rain-fed agriculture will drop by up to 50 per cent in some countries. The World Bank meanwhile  points out that climate-related water scarcity is likely to cost countries in the Sahel up to 6 per cent of their GDP. Future climate projections paint a grim picture in Sub-Saharan Africa with estimates showing that there will be more that 86 million climate migrants by 2050 if climate change remains untamed.

Recent research conducted in ASALS in Kenya estimated that close to 2 million animals could be lost by 2030 due to increased drought frequency and a combined value of USD630 million due to losses in animals, milk and meat production. The pastoralist communities have long been forgotten; a neglected people whose lives were not considered as important as other populations. International Development scholars argue that pastoralists have suffered from a biased narrative perhaps more frequently than any other group, as political systems have often locked them out of decision making and their mobile ways of living were largely perceived as a political threat. Therefore it’s important to consider pastoral development within the wider discourse, particularly where these communities are engaged in innovation and entrepreneurship. Moreover, there’s a strong need for the right mix of policy and investments to not only strengthen African policy expertise, but also encourage a diverse array of investments and initiatives, including those initiated by the private sector such as IBLI.

In 2014 IBLI was launched as an initiative of the International Livestock Research Institute (ILRI), the Kenyan government, World Bank and other partners, whose aim is to protect pastoralists susceptible to climate change. It focuses on strengthening the drought management systems in the country such as the Kenya Livestock Insurance Programme (KLIP), which targets pastoralists whose livelihoods are entirely reliant on livestock.

KLIPs signature feature is the use of satellite data to generate an index for grazing conditions to ensure that payments are prompted early during the drought season when conditions fall below a certain critical level. These satellite images are accessed free of charge and used to assess conditions of pastures. The innovation has been lauded globally for its novel approach and is largely perceived as inclusive and seeking to better the lives of pastoralists. Research on this commenced in 2009 as a public-private partnership where the government’s role was to create an enabling environment, while insurance companies sought to give effective services that included developing suitable products for pastoralists and ensuring that beneficiaries received their insurance claims swiftly.

Dr. Andrew Mude, a Principal Economist at ILRI, is the brain behind IBLI, whose work identifies risk-management and development interventions to help increase resilience and reduce vulnerability amongst poor livestock dependent households in pastoral communities. His team has won several awards for this innovation, including Kenya’s first Vision 2020 ICT Innovation Award, USAIDs inaugural Science and Technology Pioneers Award; Poverty Reduction, Equity and Growth Network (PEGNet) Best Practice Award for most innovative project; and the Norman Borlaug Award for Field Research and Application of the innovation that has changed the lives of pastoralists who now accept insurance as the norm.

Wider relevance

The technology is based on satellite data that measures the quality of pasture land every 10 to 16 days. The satellite monitors the greenness of specific geographical regions and gives data on the state of available vegetation for livestock. This enables vulnerable communities to avoid livestock losses, while reducing the negative impacts of climate change. During severe droughts, payouts to pastoralists are made based on the index data. When the data shows that available forage drops below a given threshold and livestock could perish, all insurance policyholders are paid, whether or not their animals actually die.

These payments are made directly to the pastoralists with the help of mobile money transfer (M-PESA technology) and this enables them to buy water and fodder for their livestock throughout the drought period. Over 20,000 people and over 100,000 livestock units have been covered to date, while over 700 million pay-outs have been made to 32,000 pastoralists on the edge of drought. Paid premiums total over Kshs 400 million.

KLIP is built on satellite data that shows the vegetation cover in detail, giving the true picture on the ground of availability or lack thereof of vegetation referred to as Normalised Vegetative Index (NDVI). This determines when payouts are made. It is currently being implemented in Mandera, Wajir, Turkana, Tana River, Marsabit, Isiolo, Samburu, Garissa and Kajiado counties as part of the National Disaster Risk Finance strategy, which has proven to be capable of responding to severe droughts in an efficient and timely manner.

Satellite data is important as it eradicates the need for insurance agents to be physically present in the field to monitor forage and animals. Considering the vast size of the ASALS regions, this would ordinarily be a logistical nightmare and financially impossible to provide. Currently the National government pays the insurance  premium support for five Tropical Livestock Units (TLUs) for vulnerable households. In October 2018 this number had increased to 10 TLUs.

Context and background

Extreme weather conditions continues to pose fatal threats to the over 50 million pastoralists in Africa. Drought impacts have led to setbacks in the economy and pastoralist livelihoods and response strategies have been lacking. Kenya has experienced long spates of droughts leading to losses of millions of shillings and this is despite livestock production accounting for more than 12 per cent of the country’s Gross Domestic Product (GDP). Approximately 60 per cent of Kenya’s livestock is found in ASALS, which constitutes over 70 per cent of the country.

Kenya’s drylands make up to 90 per cent of Kenya’s total area, where a population of over 10 million people raise 70 per cent of the country’s livestock. The pastoral livestock sector (meat; milk and other products) is estimated to be worth over USD 1000 million annually, with approximately 90 per cent of meat consumed in East Africa coming from pastoral herds. Kenya’s economy is dependent on agriculture, which directly contributes to 25 per cent of the GDP; 75 per cent of the country’s industrial raw products and 60 per cent of export earnings. Climate change is already affecting Kenya, with shrinking glaciers causing pastoralists to migrate into new areas. Violent outbreaks have been triggered as a result of diminishing natural resources in extreme dry months and prolonged rains at other times, causing havoc across the country. Livestock accounted for over 70 per cent of the total USD 12 billion damages caused as a result of drought experienced between 2008-2011.

Shamsa Kosar,a beneficiary of Takaful insurance, Wajir.Credit: ILRI/Riccardo Gangale(CC BY-NC-SA 2.0)

The Kenyan government recognises agricultural development as key for Kenya’s socio-economic trajectory and food security has been outlined as one element of the country’s Big 4 agenda. Agriculture is well articulated in the country’s development blueprint Vision 2030, and in the National Food Security and Nutrition Policy (NFSNP) as well as the Agricultural Sector Development Strategy (ASDS 2009-2020). The Climate Change Act 2016 provides a regulatory framework that supports enhanced responses for mainstreaming approaches such as integrating climate change considerations into development planning, budgeting and implementation in government. Moreover, the Nationally Determined Contribution (NDCs) seek to achieve adaptation and mitigation goals in line with the Paris Agreement. Nevertheless, the World Food Programme still categorises Kenya as a food insecure country and this is likely to worsen in the future due to factors related to climatic change, increasing populations, degraded land as well as reduced returns on investments in the agriculture sector.

History of Drought in Kenya

Changes in climatic systems have continued to increase the severity and frequency of droughts in the last 20 years. The first drought occurred between 1999 and 2000,  which at the time was recorded as the worst drought experienced in 37 years; over 4 million Kenyans needed food aid and 23 million people were affected in some way. This drought was characterised by livestock deaths and total crop failures which consequently led to severe food shortages in the country and especially the ASALS. A second drought occurred between 2008 and 2011, with an impact on the economy of USD 12.1 billion – approximately the country’s entire annual budget at the time. Several other droughts have affected the country and the government has been forced to declare some of them as natural disasters. They have included: the 1999-2000; 2005-2006; 2008-2009; 2016-2017. Often national food reserves have been depleted and international food aid required to supplement government’s efforts to feed its population. The ASALS have consequently been placed under Emergency Operation Programme (EMOP) during these periods.

Drought is a natural hazard in Kenya and this is expected to increase in magnitude, frequency and severity. The government intends to end drought emergencies by 2022 but this nevertheless could be jeopardised by the vagaries of climate change. Appropriate response strategies and actions for long term resilience are key especially with regards to the country’s overall socio-economic development and especially for the poorest regions. Climate finance could support actions towards climate resilience and reduce vulnerability to drought in the country.

Enabling factors

This rapid change observed in the pastoralist communities in Kenya has been occasioned by the commitment of the public-private partnerships that have catalysed change in the lives of these communities. These communities were previously ignored and innovations took little note of them due to a myriad of stereotypes. Several insurance groups such as Takaful Insurance Africa (TIA) and others are now incorporating a commercial uptake into the IBLI innovation.

After payouts, it has been noted that pastoralists have been able to access veterinary services, while some used part of the payments for restocking and maintaining their livestock and others were able to obtain production equipment. This has led to enhanced livelihoods, especially during drought. Qualitative evidence shows some beneficiaries have shared their money to support neighbours and their wider community as well as helped to fund community water projects, construction of wells and strengthening food security measures.

Supportive technologies such as the mobile money transfer M-Pesa has enhanced payment processes, curbing delays on payouts. (M-pesa) has decreased transaction costs and increased efficiency. In 2014, over 5,000 mobile phones were linked to the IBLI policies; 5 of the 33 micro-insurance services identified by the Groupe Speciale Mobile Association (GSMA) achieved greater than 1 million policies. People can subscribe to the policy or unsubscribe via a text message and the premium is deducted from the cell phone balance according to the insurance plan chosen.

In the long term, IBLI may directly raise household spending and stabilise consumption of food and other essentials. Some have been utilised for non-consumption transactions such as savings, providing informal support to vulnerable communities as well as repaying debts. The payouts have also encouraged investments in other income generating activities which in the long run could reduce poverty. IBLI’s impact on household shows that distress sales have reduced by almost 50 per cent and given pastoralists peace of mind.

It’s also important to note that women make up three quarters of policyholders and in most instances these are heads of households. They are key players in the sector despite owning mainly small ruminants. When women can get access to information on investments, finance, and technology as well as access to land and markets they are a critical element and play strategic roles in overcoming socio-cultural issues. Scholars argue that women’s access to micro-loans has played a critical role in ensuring access to financial services such as IBLI and that as pastoral communities become more settled, more women now have a say in household decisions as decisionmakers.

The technology has worked well because it has put consumers at the heart of product design; involved liaison with local non-governmental organisations, MFIs and other local organisations. There is potential for scaling up the technology and the target is to reach 10 million pastoral and agro-pastoral herders across the Horn of Africa.

Despite progress occasioned by the insurance scheme, there have been several challenges. For instance, the levels of KLIPS insurance penetrations are still low and unpredictable and there is a need for more capacity building in the ASALs. High transaction costs are still a challenge because a lot of herders are widely dispersed. Human error where improper recording of individual details such as mobile numbers and names or when pastoralists frequently change their numbers, plus network problems mean some beneficiaries have had to travel to distances of up to 80km to the nearest KLIP office to receive payment. Moreover, insurance is a complicated product and may require a large human capital to sell and service policies. This is complicated by the fact that pastoral populations of mobile herders lack financial literacy and may not recognise the benefit of financial services.

More capacity building by both National and County government officials is required in order to meet targets set. Takaful insurance company Ltd (meaning no interest) is a sharia compliant insurance company that provides insurance cover for pastoralist herders of the Islamic faith in Kenya. This is helpful as some herders won’t accept conventional insurance because of their beliefs related to interest and risk transfer. Innovative ways that incentivise pastoralists increase their adaptive capacity and resilience during shocks could also secure herder’s assets and natural resources and enhance their income. Schemes that pay pastoral herders for ecosystem services and environmental stewardship should be encouraged.

The insurance project was developed in partnership with the International Livestock Research Institute (ILRI), Cornell University and the Index Insurance Innovation Initiative program at the University of California at Davis and supported by World Bank; USAID;UKAID; DFID as well as the European Union. The products and lessons of this collaboration have been used for wider policy development in pastoral production systems across Eastern Africa.

Progression and opportunities over time

  • January 2010 saw the launch of the world’s first livestock insurance for remote African pastoralists as a result of years of research.
  • An IBLI product sale was launched in Marsabit county of Kenya in January 2010. Since then, it has been expanded to include Isiolo (August 2013), Wajir (August 2013), Garissa (January 2015) and Mandera (January 2015) in Kenya. The government is exploring taking a variant of IBLI nationwide under a proposed Kenya Livestock Insurance Program (KLIP).
  • KLIP was launched in 2014 as a pilot program in Wajir and Turkana counties where 5,000 households were covered, with over 25,000 Tropical Livestock Units (TLU) covered across the two counties (1 TLU is equivalent to 1 cow). This grew to 8 counties; Garissa, Isiolo; Marsabit; Mandera; Samburu; Tana River; Turkana and Wajir counties.
  • In 2016, the government extended the programme to all 14 arid and semi-arid counties.
  • Over Kshs 700 million has been paid since its inception and facilitated the protection of over 150,000 herders who have been vulnerable to floods or drought. Over 30,000 vulnerable households have so far been insured with premiums of USD 5 million.
  • The ministry was working to ensure that beneficiaries from fully government funded phases move to a self-sustaining commercial cover subsidising only 50 per cent.
  • Livestock production is key in the Kenyan setting as it has been provided for under Sessional Paper No. 2 of 2008 on the National Livestock Policy and the Agricultural Sector Transformation and Growth Strategy 2010-2022 and the overarching Vision 2030.
  • The government’s policy on agricultural risk management recognises the important role insurance instruments play in cushioning pastoralists from the effects of drought.
  • County governments are negotiating with national governments to provide one extra cover for every cover bought from the voluntary market for sustainability purposes.
  • Other countries looking to replicate KLIP include the Ethiopia; Niger; West Africa.
  • IBLI experience shows that emphasis should always be directed towards getting the science right with regards to contracts design, ensuring proper awareness creation and building local capacities as well as identifying, incentivising and sustaining the right public private sector partners.



Fiona Imbali

Fiona is the part of the Secretariat for the Africa Sustainability Hub, which focuses on transformative, evidence-based, and action-oriented research that will generate the basis for addressing the underlying socio-technical challenges facing sustainable development in Africa.