As climate-related crises increase globally, climate risk financing is becoming an integral part of financial protection and resilience building strategies of African countries. Drought induced crises result in devastating human impacts and high costs for vulnerable countries, threatening longer-term investments and development efforts. While earth observation (EO) has been widely used for drought early warning, new opportunities emerge from integrating EO data and methods into index-based drought risk financing (IBDRF) instruments. Such instruments aim at supporting an effective and timely response during drought shocks and improving the resilience of small-holder farmers and livestock keepers. This review documents the current status, and discusses future prospects and potential challenges for EO utilization in IBDRF applications in sub-Saharan Africa. We focus on pastoral systems, which are hotspots in terms of vulnerability to climate and environmental change, food insecurity, poverty, and conflicts. In these systems, EO-based IBDRF interventions are rapidly scaling up as part of national and international risk management strategies.
