NIMASA is campaigning to eliminate war risk insurance premiums on shipments to Nigeria, which are financially burdensome, costing the nation over $1.5 billion in recent years. This initiative is fueled by significant improvements in maritime security and the removal of piracy risks. Despite these advancements, international shipping companies continue imposing these premiums. Collaborative efforts with global maritime organizations are ongoing to rectify this situation and bolster Nigeria’s trade competitiveness.
War risk insurance (WRI) is an added cost for international shipping to Nigeria, stemming from concerns over piracy and militancy previously experienced in the region. This surcharge includes two main components: one covering liability for those onboard and cargo and the other covering the vessel itself. Despite witnessin over $1.5 billion in WRI payments to international insurers in recent years, the financial implications on Nigeria’s economy are significant, with substantial costs per voyage for large vessels.
The Nigerian Maritime Administration and Safety Agency (NIMASA), led by Dr. Dayo Mobereola, has initiated a campaign to eliminate WRI in response to its adverse economic impacts. The rationale for these surcharge premiums has diminished, given that Nigeria has not faced piracy incidents for over three years and has been officially removed from piracy-prone lists by the International Maritime Bureau. The agency aims to promote maritime development and secure a competitive shipping environment for Nigeria.
NIMASA has proactively invested in maritime security through initiatives like the Deep Blue Project, which has effectively eradicated piracy over an extensive period. This effort, in collaboration with the Nigerian Navy and international maritime organizations, has resulted in significant progress towards securing Nigerian waters. However, international shipping companies persist in charging high WRI premiums, overlooking Nigeria’s improved safety status.
Under the guidance of Minister Adegboyega Oyetola, Dr. Mobereola has engaged various international stakeholders including Chatham House and major global shipping organizations, advocating for the removal of WRI premiums. Despite recognizing Nigeria’s advancements, shipping associations have continued to impose these charges. Reducing these premiums is crucial for enhancing Nigeria’s competitiveness in global trade, ultimately attracting increased foreign investment and bolstering its economy.
NIMASA’s recent discussions with a Danish delegation have underscored the necessity for intervention to support the reduction of WRI premiums. Critics argue against Denmark’s involvement in private insurance; however, their substantial economic interests linked to shipping suggest a potential influence over the industry. Therefore, an alliance of stakeholders, including the Nigerian government and international bodies, must work collaboratively to address this financial burden and enhance Nigeria’s standing in maritime affairs.
In conclusion, the Nigerian Maritime Administration and Safety Agency (NIMASA) is advocating for the elimination of war risk insurance premiums on Nigerian-bound cargo, citing increased maritime security and diminished piracy risks. The agency’s efforts demonstrate Nigeria’s commitment to ensuring a competitive shipping environment, crucial for attracting international trade and investment. Collaborative engagement with international stakeholders and the recognition of Nigeria’s security advances are paramount for addressing and rectifying this onerous financial burden.
Original Source: www.thisdaylive.com
