• 151 communities, 6.5 million residents under threat says Red Cross

As floods wiped out over $15 billion in economic assets within two years and displaced millions of Nigerians, and recurring climate disasters pushed more families and businesses into long-term financial hardship, experts have called for urgent reforms to expand insurance coverage and disaster risk financing.

In a similar development, no fewer than 6.51 million Nigerians are at imminent risk of flooding as the country enters the peak of the 2026 rainy season, the International Federation of Red Cross (IFRC) and Red Crescent Societies have warned.

The humanitarian body stated that the anticipated floods could impact 151 communities, 49 schools, 46 health facilities, 11 markets, and 38 places of worship, particularly in vulnerable riverine and coastal areas.

The renewed call follows estimates that the country lost approximately $6.7 billion due to the devastating floods of 2022 and an additional $9 billion in 2023, resulting in cumulative economic and pandemic losses exceeding $15 billion within two years. This figure comes as climate experts warn that extreme weather events are becoming increasingly frequent.

The losses, which wiped out homes, businesses, farmlands, public infrastructure and livelihoods across several states, have intensified concerns over Nigeria’s low insurance penetration, which remains below one per cent of the Gross Domestic Product (GDP), one of the lowest levels in Africa.

The Managing Director of Heirs General Insurance, Wole Fayemi, said the increasing frequency of floods demonstrates the need for Nigeria to move beyond emergency relief and reconstruction towards building a comprehensive disaster risk financing framework capable of protecting businesses, households and public investments.

According to him, the country’s current approach places enormous pressure on governments and affected communities because most losses remain uninsured.

“The true cost of flooding is not the roads and buildings that are destroyed, it is the businesses that never reopen, the jobs that disappear and the investments delayed because recovery consumes resources meant for growth,” Fayemi said.

He observed that traders who lose their inventories, farmers whose crops are destroyed, and the small manufacturers forced to replace damaged equipment often struggle to recover because they lack financial protection.

He listed the long-term consequences to include declining productivity, rising poverty, business closures and reduced economic activity long after floodwaters have receded.

Fayemi stressed that insurance should no longer be viewed merely as a financial product but as a strategic component of national economic infrastructure capable of preserving productive assets, protecting household wealth and accelerating post-disaster recovery.

To that end, he urged governments at all levels to establish dedicated disaster risk financing mechanisms, integrate insurance into climate adaptation programmes and expand affordable insurance products for farmers, small businesses and vulnerable households living in flood-prone communities.

He also called for the inclusion of flood insurance in public infrastructure projects and government-backed housing schemes to reduce future fiscal pressures arising from climate-related disasters.

According to him, regulators and insurers must collaborate to close Nigeria’s insurance protection gap through product innovation, digital distribution, greater public awareness and prompt settlement of genuine claims.

The Chairman of Nigerian Insurers Association (NIA), Mrs Ebelechukwu Nwachukwu, said climate change has significantly altered Nigeria’s risk environment, making insurance an essential instrument for economic resilience.

She noted that though insurers have continued to introduce products that respond to emerging climate risks, low public awareness, affordability concerns and weak enforcement of compulsory insurance have continued to limit insurance uptake.

“Insurance is designed to restore businesses and households after unexpected losses. As climate-related disasters become more frequent, the need for adequate insurance protection becomes even more compelling,” she stated. “Building public confidence through prompt claims settlement and greater awareness remains critical to increasing insurance penetration.”

Similarly, the Commissioner for Insurance, Olusegun Omosehin, has repeatedly maintained that the ongoing recapitalisation of the insurance industry under the Nigerian Insurance Industry Reform Act (NIIRA) 2025 is designed to produce stronger insurers capable of underwriting larger and more complex risks, including those associated with climate change.

According to him, stronger capital bases will improve insurers’ claims-paying ability, enhance public confidence and enable the industry to retain more strategic risks within the domestic economy.

Financial analysts noted that while governments continue to spend billions of naira on emergency interventions after major floods, relatively little attention has been given to building sustainable financial resilience through insurance and disaster risk financing.

They argued that expanding agricultural insurance, property insurance, catastrophe insurance and microinsurance would reduce pressure on government finances while enabling affected households and businesses to recover more quickly after disasters.

The analysts further observed that Nigeria’s vulnerability to climate shocks has increased significantly over the past decade, making disaster risk financing an economic necessity rather than a policy option.

They maintained that strengthening collaboration among governments, regulators, insurers, development finance institutions and international partners would be critical to closing the country’s protection gap and improving resilience against future climate disasters.

With the Nigeria Hydrological Services Agency (NIHSA) recently issuing fresh flood alerts for several states, stakeholders warned that the country can no longer rely solely on post-disaster relief but must institutionalise insurance and risk financing as key components of national development planning.

They stressed that unless adequate financial protection mechanisms are put in place, recurring floods will continue to destroy livelihoods, widen poverty, discourage investment and undermine Nigeria’s economic growth ambitions.
IN the meantime, the IFRC’s warning is contained in its Imminent Disaster Response Emergency Fund operation document (Appeal No. MDRNG045), which draws on forecasts by the Nigeria Hydrological Services Agency, the Nigerian Meteorological Agency and the IFRC’s West and Central Africa Risk Analysis.

The IFRC classified Nigeria as “High Risk Prepare” and approved 80,000 Swiss francs (about N181m) from its Disaster Response Emergency Fund to support the Nigerian Red Cross Society in scaling up early warning systems, evacuation planning and community preparedness across eight states.

The report stated that floodwaters were expected to peak around August 1, warning that rising river levels and saturated soils had significantly increased the risk of widespread flooding.

“The current forecasts are consistent with the 2026 Seasonal Climate Prediction issued by the Nigerian Meteorological Agency and the IFRC West and Central Africa Risk Analysis, which classifies Nigeria as ‘High Risk Prepare,’ with an estimated 6.51 million people exposed to imminent flood risk, particularly in vulnerable riverine and coastal communities,” the report stated.

According to the document, NIHSA’s 2026 Annual Flood Outlook projects that about 250,788 square kilometres of Nigeria could be inundated this year, with 138,227 square kilometres, representing 55.1 per cent, categorised as high-risk areas likely to experience severe flooding.

The outlook identified more than 14,000 communities across 266 Local Government Areas in 33 states and the Federal Capital Territory as facing high flood risk, while another 15,500 communities in 35 states fall within the moderate-risk category.

On July 14, NIHSA also placed Adamawa, Akwa Ibom, Anambra, Bauchi, Benue, Borno, Cross River, Edo, Enugu, Imo, Kaduna, Niger and Plateau states on a medium flood alert after river levels at 16 hydrological stations approached critical thresholds.

The agency projected localised flooding along the Karam, Waya and Amber rivers in Adamawa and Bauchi states. Preliminary exposure mapping showed that the projected flood footprint threatened 151 communities, 49 schools, 46 health facilities, 11 markets and 38 places of worship.

Despite the scale of the risk, the IFRC said available funding would enable direct intervention for only about 16,000 people in 16 priority Local Council Areas across Adamawa, Akwa Ibom, Bauchi, Benue, Cross River, Edo, Lagos and Plateau states.

The organisation said the selected councils were chosen based on their vulnerability, exposure and limited access to existing anticipatory-action programmes, while a wider population would benefit indirectly through early warning campaigns, radio broadcasts and community sanitation activities.

The report noted that localised flooding had already occurred in parts of Lagos, Akwa Ibom, Bauchi and Plateau states, indicating that ground conditions had become saturated even before the peak of the rainy season.