NIMASA aims to eliminate war risk insurance premiums on Nigeria-bound cargo, having paid over $1.5 billion in the last three years. With piracy incidents eliminated, NIMASA’s campaign focuses on promoting economic growth and rectifying unjust fees imposed by international insurers. Strategic investments in maritime security and international diplomacy are central to driving this initiative forward.
War risk insurance (WRI) is a surcharge placed by international shipping companies on cargo headed for Nigeria, covering liability for people and goods aboard vessels as well as the vessels themselves. This surcharge emerged during the rise of Niger Delta militancy and piracy, costing Nigeria over $1.5 billion in the last three years to various foreign insurers. The financial impact is significant, with surcharges per voyage for large vessels reaching nearly $525,000.
The Nigerian Maritime Administration and Safety Agency (NIMASA), led by Dr. Dayo Mobereola, has initiated a campaign to abolish WRI premiums on shipments to Nigeria, according to its legal mandates under the NIMASA Act and the Merchant Shipping Act. With piracy incidents significantly reduced and Nigeria officially removed from lists of piracy-prone countries, NIMASA aims to stimulate economic growth by reforming maritime regulations. Despite the progress made, WRI premiums remain imposed by international shipping companies.
Nigeria has invested heavily in maritime security initiatives like the Deep Blue Project, successfully eliminating piracy for over 30 months. Collaborations with global bodies, including the International Maritime Organization (IMO), have further enhanced Nigeria’s security reputation. However, international shipping companies continue to impose high premiums, ignoring these advancements in security.
In response, Dr. Mobereola has advocated for Nigeria on international platforms, including discussions with renowned organizations such as BIMCO and the International Chamber of Shipping. He highlighted the financial strain unjustly placed on Nigeria due to persistent WRI premiums, despite substantial investments in maritime safety. Key international players have acknowledged Nigeria’s progress, indicating support for the removal of these excessive costs.
NIMASA’s engagement with international partners, including a recent dialogue with a Danish delegation, emphasizes the need for advocacy against high WRI premiums. Although some critics argue Denmark’s ability to influence private insurance matters, its interest in Maersk’s operations may sway the industry. Bringing attention to this burden could lead to decreased insurance costs for Nigeria, further enhancing its competitiveness in global trade while fostering foreign investments.
Nigeria’s campaign to eliminate war risk insurance premiums aims to significantly reduce economic burdens associated with international shipping. With noteworthy progress in maritime security and diplomatic efforts, the country seeks to engage international stakeholders to acknowledge its improved risk status. The removal of these premiums is critical for Nigeria’s economic competitiveness, and actionable support from global partners will be vital in achieving this objective. The movement towards eliminating WRI premiums is imperative for enhancing Nigeria’s position in global maritime trade.
Original Source: www.thisdaylive.com
