Despite the reduction in piracy attacks in the Gulf of Guinea, importers paid $1.5bn as war risk insurance premiums on Nigeria-bound cargoes in the last three years, The PUNCH reports.
This came as operators, including shipowners and ship captains, rejected the WRI premium, stating that Nigeria is not a war-torn country to be paying such a premium.
The Nigerian Maritime Administration and Safety Agency on Thursday, revealed that in the last three years, Nigeria paid over $1.5bn to Lloyd’s of London, Protection and Indemnity Insurance, and other foreign insurance firms in War Risk Insurance Premium.
The Head of Public Relations at NIMASA, Osagie Edward, stated this in a statement made available to our correspondent in Lagos
Data from NIMASA showed that Nigeria has 4,610 flagged vessels with a total tonnage of 6,131,814.55 gross registered tonnage and 1,102 cabotage vessels with a combined tonnage of 2,037,184.63 GRT.
This means a total of about 4.610 vessels might be paying this WRI premium.
War Risk Insurance Premium is an additional surcharge imposed by international shipping companies on cargo bound for Nigeria. It comprises two key components: war risk liability, which covers people and goods aboard the vessel and is calculated based on the indemnity amount, and war risk hull, which covers the vessel itself and is determined by its value.
Edward explained that the financial burden was initially introduced during the height of Niger Delta militancy and piracy. He stated that the impact of this payment on Nigeria’s economy is staggering.
According to Edward, for a very large crude carrier valued at $130m, “the WRI surcharge per voyage is approximately $445,000. For new container vessels valued at $150m, the cost rises to $525,000 per voyage.”
“Although the Nigerian Bureau of Statistics does not have precise data on the total WRI payments made to international insurers, available figures indicate that Nigeria has paid over $1.5bn in the last three years alone to Lloyd’s of London, Protection and Indemnity insurance, and other foreign insurance firms,” Edward said.
Edward highlighted that Maersk Line, one of the world’s largest shipping companies, also introduced a transit disruption surcharge of up to $450 per container, while other shipping lines impose a war risk surcharge of $40–$50 per 20-foot container.
However, Edward mentioned that recognising the severe economic implications of the WRI, NIMASA, under the current leadership of Dr Dayo Mobereola, has launched an aggressive campaign to eliminate war risk insurance on Nigeria-bound cargo.
Edward said the NIMASA Act and the Merchant Shipping Act mandate the agency to promote shipping development, and removing the WRI premium has become a central focus of its maritime reforms.
“The security concerns that originally justified these premiums no longer exist,” Edward said.