Disaster risk financing: An overview from Lesotho

This brief unpacks the disaster management landscape in Lesotho looking at disaster risk financing (DRF) policies – both financial and disbursal mechanisms. The Kingdom of Lesotho, a small country in Southern Africa, is highly vulnerable to climate hazards such as drought, heatwaves, and floods, is equipped to make use of DRF. Financial resilience to weather-related disasters is a growing area of importance for governments around the world, as they tend to shoulder most of the disaster-related costs.

The brief found that in Lesotho:

1. A paradigm shift from reactive to anticipatory approaches to disaster risk management has occurred, evidenced by the 2020 Disaster Risk Management Bill and the 2020 MoU signed by the Government of Lesotho and the African Risk Capacity.
2. While the country is preparing to develop a national DRF strategy, existing financial disbursal mechanisms need to be adapted alongside it. This includes:
   1. Making two disaster contingency funds fit for anticipatory action
   2. Developing shock-responsive social safety nets that can be scaled both up and out
   3. Continuing the shift from manual social protection cash transfers to digital cash transfers