Campaign launched to end war risk insurance premiums on Nigeria-bound cargo
The Nigerian Maritime Administration and Safety Agency (NIMASA) has launched a campaign to eliminate war risk insurance (WRI) premiums on Nigeria-bound cargo.
The NIMASA Act and the Merchant Shipping Act mandate the agency to promote shipping development, and NIMASA said removing the WRI premium has become a central focus of its maritime reforms.
WRI 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.
WRI was initially introduced during the height of Niger Delta militancy and piracy. 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 US$1.5 billion in the past three years alone to various foreign insurance firms.
The agency said the security concerns that originally justified these premiums no longer exist, as Nigeria has not recorded a single piracy incident in over three years, and in 2021, the International Maritime Bureau officially removed Nigeria from its list of piracy-prone countries.
NIMASA reiterated that, over the past five years, it collaborated with the Nigerian Navy in cracking down on piracy in the Gulf of Guinea. The agency said, however, that international shipping companies have continued to impose WRI premiums on Nigeria-bound cargo.
"In 2023, the International Bargaining Forum further validated Nigeria’s progress by delisting the country from the list of high-risk maritime nations," NIMASA said in a statement on Thursday, March 27. "With piracy no longer a concern, why has the international shipping community continued to impose these excessive premiums?"
The agency said the impact of WRI on Nigeria's economy is "staggering". For example, for a very large crude carrier valued at US$130 million, the WRI surcharge per voyage is approximately US$445,000. For new container vessels valued at US$150 million, the cost rises to US$525,000 per voyage.
NIMASA Director Dr Dayo Mobereola has taken Nigeria's case to international stakeholders, urging them to support the removal of WRI premiums. He engaged Chatham House, where he met with Dr Alex Vines, Director of the Africa Programme, who agreed to bring the matter to the attention of the United Nations.
NIMASA has also engaged global shipping organisations including BIMCO, the International Chamber of Shipping, Intercargo, and Intertanko. In his discussions with these organisations, Dr Mobereola emphasised that Nigeria has invested billions in maritime security, yet continues to be unfairly penalised.
The director has urged the global shipping community to recognise Nigeria's improved security status and remove what it calls the "unjustified" WRI premiums.
