NIMASA is pursuing the removal of war risk insurance premiums to alleviate the financial burden on Nigeria’s shipping industry. Having incurred over $1.5 billion in WRI payments amid improved maritime security and the eradication of piracy, NIMASA’s campaign focuses on international engagement and recognition of Nigeria’s safety advancements. The removal of these premiums is paramount for enhancing Nigeria’s global trade competitiveness.
War risk insurance (WRI) represents an additional cost for international shipping companies on cargo bound for Nigeria, comprising war risk liability and war risk hull components. Initially established due to threats from Niger Delta militancy and piracy, Nigeria has incurred over $1.5 billion in WRI payments to foreign insurers over recent years. This surcharge cost approximates $445,000 per voyage for Very Large Crude Carriers (VLCCs) and $525,000 for new container vessels. Furthermore, shipping lines have implemented additional surcharges for transit disruptions, compounding the financial implications for Nigeria’s economy.
Acknowledging the detrimental economic effects of these surcharges, the Nigerian Maritime Administration and Safety Agency (NIMASA), led by Dr. Dayo Mobereola, has initiated a vigorous campaign to abolish WRI on Nigeria-bound cargo. The NIMASA Act and Merchant Shipping Act mandate support for shipping development, rendering the removal of the WRI premium a critical focus. The original security concerns justifying these premiums have dissipated, with Nigeria free of piracy incidents for over three years and official recognition from the International Maritime Bureau (IMB) as a non-piracy-prone nation.
Despite NIMASA’s significant success in reducing piracy and enhancing maritime security—culminating in the Deep Blue Project and commendations from the International Maritime Organization (IMO)—international shipping companies persist in imposing WRI premiums. This continuous charge contradicts Nigeria’s advancements in safety and security, as recognized by the International Bargaining Forum (IBF) when it removed Nigeria from its list of high-risk maritime nations.
In a strategic effort to eliminate these insurance burdens, Dr. Mobereola has engaged with various international stakeholders, including Chatham House and several major global shipping organizations. He highlighted Nigeria’s substantial investments in maritime security and advocated for the recognition of its improved safety status. Support from representatives such as Stinne Taiger Ivø of BIMCO emphasizes the need for shipowners to lead efforts in reducing these unjust premiums, while Zhou Xianyong from INTERCARGO has backed NIMASA’s campaign.
Furthermore, recent meetings with a Danish delegation aim to persuade Denmark to advocate for reduced war risk premiums, leveraging its vested interests in shipping giants like Maersk. The argument that Denmark cannot intervene in private insurance issues overlooks the broader economic implications for both nations. NIMASA’s initiatives have elevated Nigeria’s maritime positioning globally, urging all stakeholders, including the government and international bodies, to support the removal of these unfair financial burdens. The call for change is immediate and essential for Nigeria’s maritime industry and continues to resonate with the need for sustainable economic growth.
The Nigerian Maritime Administration and Safety Agency (NIMASA) is actively campaigning to eliminate war risk insurance premiums that impose severe financial burdens on Nigeria-bound cargoes. Despite the successful reduction of piracy and improvement in security, international shipping companies continue to enforce such charges. With ongoing diplomatic efforts and international support, NIMASA seeks to change the current status, advocating for a reassessment of Nigeria’s maritime security status and striving for a fairer distribution of shipping costs. Ultimately, removing these premiums is crucial for Nigeria’s economic competitiveness and growth in global trade.
Original Source: www.thisdaylive.com
