Kenya has introduced a new disaster risk financing strategy that integrates funding for disaster prevention preparedness, emergency response and recovery, marking a shift from the traditional approach of focusing mainly on financial support after disasters occur.
Finalised in June 2026 the strategy aims to help the government manage the financial consequences of disasters while investing in measures to reduce risks before they cause damage. The approach comes as disaster losses rise and international aid budgets face growing pressure.
The strategy was developed by the Kenyan government in collaboration with the Centre for Disaster Protection and the United Nations Office for Disaster Risk Reduction (UNDRR). It is designed to align disaster related financial planning with the country’s broader disaster management policies and public financial management systems.
Kenya became the first country in Africa to adopt a disaster risk financing strategy in 2018. However its earlier framework, like many similar strategies worldwide focused primarily on mechanisms such as insurance and pre-arranged funding to cover losses that remained after prevention and preparedness efforts.
The new strategy expands this approach by addressing disaster risks across the entire cycle, including investments that can prevent damage to homes schools and critical infrastructure.
Why Disaster Financing Needs to Change
Disaster risk financing involves arranging financial resources before a disaster occurs so governments can respond without scrambling for funds after an emergency.
The concept gained momentum following major disasters. After the 1999 Marmara earthquake in Turkey the government established a national earthquake insurance pool. Following Hurricane Ivan in 2004 Caribbean finance ministries created the Caribbean Catastrophe Risk Insurance Facility.
These initiatives encouraged finance ministries to treat disaster related losses as financial liabilities that needed to be anticipated, reduced and managed in advance. The World Bank introduced the term “disaster risk financing” in 2010.
More than 25 governments have since developed disaster risk financing strategies, generally led by their finance ministries. However, many of these frameworks have focused on financing the risks remaining after prevention and preparedness measures, leaving disaster management agencies and finance ministries working through separate strategies.
This separation can lead to inefficient spending. For example, insuring schools against flood damage without first investing in flood protection can leave governments repeatedly paying to repair or replace damaged buildings.
Between 2019 and 2023 contingent credit and insurance expanded, but only around 1 per cent of total development assistance was classified as funding for disaster risk reduction, prevention and preparedness, according to the report.
Kenya’s new framework seeks to address this imbalance by connecting financial planning with investments that reduce the likelihood and severity of disaster losses.
Four Priorities for Disaster Risk Financing
The approach aligns with the Sendai Framework for Disaster Risk Reduction, the international agreement that guides efforts to understand disaster risks strengthen governance, invest in resilience and improve preparedness for response and recovery.
The first priority is to broaden the definition of disaster risk financing so that it covers prevention, preparedness response and recovery, rather than focusing primarily on losses that remain after risk reduction measures.
Second governments need to ensure that more funding reaches prevention and resilience programmes before disasters strike. The article cites a recent $100 million resilience bond from the Development Bank of Latin America and the Caribbean (CAF) as an example of financing directed towards resilience.
Kenya, Pakistan, Tonga and South Africa are also developing approaches to improve disaster financing and strengthen the evidence base for effective interventions.
Third, national strategies should be grounded in quantified disaster risks, multi year cost estimates and clear rules for allocating funds to risk reduction. This would help governments understand their potential liabilities and plan investments according to their needs.
Fourth, finance ministries should work closely with disaster management agencies to arrange funding for unavoidable risks before disasters occur. The right combination of financial instruments will vary according to each country’s circumstances and institutional arrangements.
Other Countries Are Expanding Resilience Investments
Kenya’s approach reflects a broader international shift towards integrating disaster prevention into public spending decisions.
The article highlights India’s $6 billion investment in disaster risk reduction, Australia’s annual allocation of $200 million for disaster resilience and Guatemala 113 per cent increase in its resilience budget.
These examples illustrate growing efforts to strengthen preparedness and reduce future losses rather than relying predominantly on emergency assistance and post disaster reconstruction.
The G20’s Voluntary High Level Principles for Investing in Disaster Risk Reduction also support this direction, calling for investments that reduce risks alongside financial arrangements for losses that cannot be prevented.
Prevention Must Be Part of Financial Planning
The new strategy does not suggest that every disaster can be prevented or that all financial losses can be eliminated. Instead, it seeks to ensure that governments invest in reducing avoidable risks while preparing to meet the costs of disasters that still occur.
The approach is particularly relevant for protecting homes, schools and other essential infrastructure, whose resilience often depends on decisions made years before a disaster strikes.
Kenya’s experience could offer lessons for other countries seeking to connect disaster management with public finance. The central challenge will be translating national strategies into sustained investments, coordinated institutional action and clear funding arrangements that support communities before, during and after disasters.