War risk premium elimination will save Nigeria $400bn annually — NIMASA
The Nigerian Maritime Administration and Safety Agency (NIMASA) has stated that the removal of war risk insurance premium placed on Nigeria-bound cargoes by foreign shipping companies will save the nation a whooping $400 billion annually. Osagie Edward, Head of Public Relations at the Nigerian Maritime Administration and Safety Agency, NIMASA, in a statement to itemise […]
Nigerian Maritime Administration and Safety Agency (NIMASA).
The Nigerian Maritime Administration and Safety Agency (NIMASA) has stated that the removal of war risk insurance premium placed on Nigeria-bound cargoes by foreign shipping companies will save the nation a whooping $400 billion annually.
Osagie Edward, Head of Public Relations at the Nigerian Maritime Administration and Safety Agency, NIMASA, in a statement to itemise series of charges imposed on Nigeria said war risk insurance (WRI) is an additional surcharge imposed by international shipping companies on Nigeria-bound cargo.
Osagie explained that WRI comprises two key components which, according to him, include war risk liability, that 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.
He stated that this financial burden was initially introduced during the height of Niger Delta militancy and piracy.
He explained that though 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 $1.5 billion in the past three years alone to Lloyd’s of London.
He disclosed that this amount covers the cost of protection and Indemnity (P&I) insurance, and other foreign insurance firms.
“The impact on Nigeria’s economy is staggering: for a Very Large Crude Carrier (VLCC) valued at $130 million, the WRI surcharge per voyage is approximately $445,000.
“For new container vessels valued at $150 million, the cost rises to $525,000 per voyage. Maersk, one of the world’s largest shipping companies, has 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.
“Recognising the severe economic implications of this financial burden, NIMASA under the leadership of Dr Dayo Mobereola has launched an aggressive campaign to eliminate war risk insurance on Nigeria-bound cargo.”