Financializing Drought Risk: Introducing Neoliberal Assumptions into Africa’s Drylands

Pastoral communities in Africa’s drylands predominantly rely on livestock raising, with the Horn of Africa (HoA) being a key region characterized by complex socio-political and environmental dynamics. Climate-induced shocks, particularly frequent droughts, pose serious challenges to these pastoralists. In response, both state and non-state actors have implemented various programs, promoting market-based strategies like insurance as solutions to climatic risks. Among these, index-based livestock insurance (IBLI) stands out as a recent climate risk financing solution for smallholder farmers and pastoralists. It is praised as an innovative, market-driven strategy to mitigate drought risks for the most vulnerable pastoralists. Despite over a decade of implementation, the uptake of IBLI has been disappointing, prompting a need to examine the assumptions underlying the insurance product. A crucial aspect is how the insurance model aligns with pastoralist practices related to drought risk – specifically their conceptualizations, experiences, and responses. This study aims to identify which elements of local drought risk responses – categorized by gender, age, wealth, and location – are reflected in the insurance model within the Borana pastoral system of southern Ethiopia. It also offers insights into how the neoliberal assumptions of insurance and similar market-based solutions align or misalign with pastoralist practices in the drylands.