Why is ARP (Airfield Reference Point) needed?
I don't know which country you are referring to.  These are countries that rely on TERPs for instrument procedures.
From the FAA TERPs Order 8260.3D

Definitions

Airport reference point (ARP). The official horizontal geographic location of an airport. It
is the approximate geometric center of all usable runways at an airport.




Page 2-16: The ARP is used to center the MSA on the airport.
Page 3-7:  The ARP is used to determine the distance requirements of remote altimeter settings.
Page 11-5:  The ARP is used to align the FAC with a circling only approach.
Page 14-31: The ARP is used to center the VCOA (Visual Climb over Airfield)