Index-Based Livestock Insurance and Pastoralist Welfare in Northeastern Nigeria

This study evaluates the potential welfare impact of index-based livestock insurance (IBLI) for pastoralist communities in northeastern Nigeria, with a focus on Adamawa and Taraba states. Pastoralists in the region face extreme livelihood vulnerability from livestock mortality events linked to drought, disease, and conflict. Conventional livestock insurance products relying on individual loss verification are operationally infeasible in pastoral contexts due to herd mobility and verification cost. Index-based products using satellite-derived vegetation indices or rainfall triggers offer a viable alternative, but their welfare implications in the specific context of northeastern Nigerian pastoralism require systematic analysis. This research employs a welfare simulation and primary survey design. Baseline data from 350 pastoralist households are collected across six grazing zones in the two states, capturing herd size, composition, mortality history, income sources, and consumption patterns. A welfare simulation model calibrated to local IBLI contract parameters estimates the consumption smoothing and asset preservation effects of alternative IBLI designs under representative drought and non-drought scenarios. Willingness-to-pay analysis establishes demand-side feasibility. Preliminary findings are expected to demonstrate significant welfare gains from IBLI under drought scenarios, with basis risk analysis identifying residual welfare gaps. The study recommends pilot IBLI deployment in partnership with NEMA, pastoral development authorities, and international re-insurers. Keywords: Index-Based Livestock Insurance, Pastoralist Welfare, Northeastern Nigeria, IBLI, Basis Risk.