Assembly/AU/Dec.417(XIX) Page 1 DECISION ON THE AFRICA RISK CAPACITY (ARC): SOVEREIGN DISASTER RISK SOLUTIONS Doc. EX.CL/724(XXI) The Assembly, 1. TAKES NOTE of the Report of 5th Joint Annual Meeting of the AU Conference of Ministers of Economy and Finance and ECA Conference of African Ministers of Finance, Planning and Economic Development on the African Risk Capacity (ARC); 2. AWARE of the escalating impact of extreme weather events driven by climate change, developing mechanisms for sovereign level risk management remains an urgent priority; 3. ACKNOWLEDGES that the current system of ad hoc unpredictable funding for disaster response causes the depletion of critical assets and the reallocation of government resources from planned investment in times of crisis, slowing economic growth and creating significant setbacks to development; 4. FURTHER TAKES NOTE that the innovative financial strategy for the African Risk Capacity to achieve solvency and sustainability would include initial donor contributions and on-going premium payments from Member States that participate on a voluntary basis, allowing for use of modern financial tools without direct impact to national budgets of non-participating states; 5. RECOGNIZES that while drought is a major threat to food insecure populations, coverage of other naturally occurring hazards such as floods, earthquakes and cyclones would facilitate the participation of more countries and should be modelled and incorporated into the facility; 6. RECALLS the establishment of the Joint Africa-Arab Fund for Disaster Response (Assembly/Africa-Arab/Res.2(II)) adopted at the Second Africa-Arab Summit in Sirte, Libyan-Arab Jamahiriya on October 10, 2010 “to establish a fund for disaster response, the statutes, objectives and modalities of which are to be defined by the Commission and the League of Arab States; 7. ENDORSES in-principle, the proposal to establish ARC; 8. REQUESTS the Commission in collaboration with ARC Secretariat to elaborate a legal agreement for the establishment of the African Risk Capacity (ARC); 9. DECIDES that ARC shall be established as a Specialized Agency of the African Union and accorded the privileges and immunities specified in the OAU General Convention on Privileges and Immunities;