Drought Forecast-based Financing: lessons learned in building a trigger menu for anticipatory action in Mozambique and Zimbabwe

To support Mozambique and Zimbabwe in the mitigation and management of droughts, the World Food Programme (WFP) is seeking to implement innovative approaches to protect people’s livelihood who face drought risk. The approach that has potential of closing the humanitarian funding gap is Forecast-based Financing (FbF). FbF enables anticipatory actions against droughts using seasonal forecasts, which are implemented to reduce impacts in the critical window between a forecast and an event. An important step for leveraging seasonal forecasting information to implement FbF is the development of an operational trigger system for drought anticipatory action.

During the past year, WFP has been developing, and is currently testing, a FbF system for droughts in eight pilot districts across Mozambique and Zimbabwe using the ECMWF 7-month rainfall ensemble forecast. This system aims to reduce the impact of droughts by releasing anticipatory action based on the forecast of a drought of mild, moderate, and severe categories. In its current set up, droughts are defined in the system through the Standardized Precipitation Index (SPI), and therefore focuses on detecting rainfall anomalies within key months of the growing season in the pilot areas. Based on an extensive skill assessment, we find that there are several opportunities for implementing FbF against droughts in the four pilot districts using the ECMWF long-range forecasting information, which opens opportunities for scaling up.

In addition to reliable seasonal forecast information, a drought FbF system requires substantial articulation between national actors on the selection of which forecast trigger to be used for the identified anticipatory action. For this, WFP has been working with several governmental agencies and stakeholders for a joint development of a nationally agreed drought contingency plan and system. However, given the inherent complexity of this climate phenomenon, reaching a common agreement on the definition of drought and a trigger menu is a difficult, and yet, a prime task. In addition, forecasting information should be coupled with a systematic decision of when to act to effectively enable the reduction of impacts as well as with a clear and standardized procedures of how to mobilize resources, to target beneficiaries and to act.

With this abstract we seek to share lessons learnt and technical challenges experienced with the process of developing an operational drought forecast-based financing system embedded into national systems. Besides its complex and interlinked configuration, we believe that implementing FbF against droughts based on forecast information can help humanitarian organizations to prepare more articulated response plans that can better leverage and preserve the gain of development programming, reduce losses to livelihoods and cost of humanitarian operations while supporting communities in a more dignified manner.