$400m Premium: Stop War Risk Surcharge On Nigerian-bound Vessels, NIMASA Cries Out

The Nigerian Marítime Administration and Safety Agency (NIMASA) has called for the abolition of war risk surcharge on vessels coming into the shores of the country, saying Nigeria’s coastal water and Gulf of Guinea (GoG) are now safer.

LEADERSHIP reports that a War Risk Surcharge is an additional cost added to sea freight or insurance premiums when a shipment is deemed high-risk due to political instability or conflict in the shipping route or destination.

Nigeria has been paying a significant amount annually. For instance, it was reported that Nigeria pays a minimum of $400 million annually in war risk premiums, despite improvements in maritime security in the past four to five years.

Additionally, from 2020 to 2023, Nigeria-bound vessels paid an estimated $620 million in war-risk insurance premiums.

However, speaking on Thursday during the mid-term review of the Danish Maritime Security Project facilitated by the Kofi Annan International Peacekeeping Training Center (KAIPTC), Ghana, the director general of NIMASA, Dr Dayo Mobereola, said with Nigeria’s massive investment in the Marítime Security Architecture also known as Deep Blue Project, the surcharge should have stopped on Nigerian bound vessels as the GoG is now safer for shipping.

According to the NIMASA DG, who was represented by the executive director of Finance and Administration, Chidi Ofodile, there has been no Piracy incident on Nigeria’s coastal water or the Gulf of Guinea since 2022.

He, however, said that the agency sought the Danish government and other international organizations’ support to end the war risk surcharge on Nigeria-bound vessels.

“Given the commitment NIMASA and the investment the federal government of Nigeria has made in maritime security to ensure almost zero incidents of piracy and robbery within the Gulf of Guinea in the past four or five years, there’s no reason for the current War Risk Insurance premium paid by vessels coming down this area.

“We expect that, given the commitment we’ve made as an agency and as a country, that the War Risk Insurance premium ought to have come down.”

“So, with this cooperation we seek with the Danish Government, we expect that premium and freight costs and other issues will have to be addressed by the international community.”

Dr Mobereola, however, urged the Danish government to ensure that war risk surcharges are lifted on Nigerian-bound vessels, saying the responsibility of lifting such sanctions shouldn’t be left to the private sector.

“When sanctions come from Europe and America or international communities generally, it comes from the government, but when we seek some response from them as in considering what investments we’ve made and achievements, concrete, verifiable achievements made so far, they now explain that those insurance companies are private companies.

“That distinction doesn’t make sense. If it is clear to the world that we’ve done our bit, then the world must respond. We will, however, engage the Danish government and the international communities on this sir,” the DG said