The Nigerian Shippers’ Council (NSC) has called for a drastic review or removal of the war risk insurance (WRI) surcharge on Nigerian-bound vessels.
The Executive Secretary of the NSC, Dr. Pius Akutah, made this call at the 3rd MARAN Annual Maritime Lecture (MAMAL), noting that despite significant reductions in piracy and armed robbery attacks at sea, Nigeria remains unfairly classified as a high-risk shipping zone.
This classification has resulted in exorbitant war risk insurance premium surcharges, which are ultimately transferred to businessmen, inflating the prices of goods and undermining the competitiveness of maritime trade. Akutah emphasised that the NSC would consistently campaign for the review or removal of the surcharge, citing the improved security matrix and Nigeria’s demonstrable commitment to safe shipping.
The NSC is engaging with international underwriters, Lloyd’s Market Association, and local counterparts to advocate for a data-driven reassessment of the risk status of Nigerian waters. The council is also working with the Nigerian Maritime Administration and Safety Agency (NIMASA) and other agencies to compile and present empirical evidence that reflects the current security reality in the nation’s maritime domain.
The Director General of NIMASA, Dr. Dayo Mobereola, commended MARAN for bringing the topical issue to the fore, noting that it has become a problem bothering on national security and trade policies. He explained that Nigeria’s statutory geographical position in the Gulf of Guinea exposes her to maritime insecurity, driven by piracy, armed robbery attacks, and geographical conflicts, leading to the imposition of war risk insurance premium.
Despite significant progress made in securing the nation’s maritime domain, with no recorded incident in the last four years, the impact of war risk premium on the Nigerian economy has continued to be enormous. Nigerian importers and exporters have paid over $5 billion worth of war risk insurance premium over the last three years.
The Minister of Marine and Blue Economy, Chief Adegboyega Oyetola, proposed a three-way approach to addressing the issue. The approach includes engaging with the international shipping community, developing local capacity, and empowering Nigerian shipowners. The Minister has also directed NIMASA to commence the process of disbursing the Cabotage Vessels Financing Fund to help shipowners acquire vessels and develop indigenous capacity.
Additionally, plans are underway to revive a national carrier for the country, which would be championed by the private sector with government backing. The Minister’s representative, Dr. Bolaji Akinola, explained that the old carrier was fully government-owned and that was the majority reason for its sudden collapse, but the new one would be championed by the private sector, with government backing by creating an enabling environment for it to thrive.
The Chairman of the occasion, Engineer Greg Ogbeifun, noted that it was time for all participants in the conference to establish a platform to participate in the carriage of the nation’s import and export goods rather than just merely talking about it. He appealed that the event should not be tailored towards the usual “talk shop” but should be one with a measurable achievement.
A former Director General of NIMASA, Captain Temisan Omatseye, expressed dissatisfaction that the Joint War Risk Committee (JWC) in London is charging a zero point two five per cent on every vessel that gets five degrees east of the Lagos harbour. He noted that Nigeria had lost its eyes on the ball and that the country needs to find a lasting solution to the lingering issues of war risk insurance premium on Nigerian importers and exporters.
The President of MARAN, Mr. Godfrey Bivbere, charged the experts to confront the burdensome issue of WRI premium headlong, as its cost implications are really undermining competitiveness, cost efficiency, and are eroding investors’ confidence in the shipping sector.
The one-day conference featured a robust panel discussion on the way forward to reducing or removing the vexed issue of WRI premium surcharge on Nigerian-bound vessels and was well-attended by industry experts and stakeholders.