Maritime
Cartel fuels war risk premiums in Nigerian waters despite piracy reduction-NIMASA DG
Pledges to put N50bn modular floating dock into proper use
Cartel fuels war risk premiums in Nigerian waters despite piracy reduction-NIMASA DG
. To put N50bn modular floating dock into proper use
By Òlopà Ìlegbé
The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola, has said that the war risk premium imposed on vessels operating in Nigerian waters persisted due to the influence of a cartel within the international insurance sector.
Daily Sun learnt that Nigeria paid a whopping N456 billion on the war risk premium imposed on Nigerian cargoes by international insurance organisation between 2022 up to till date.
However, despite significant improvements in maritime security and reduction in privacy, Mobereola decried that the war risk premium continues to inflate the cost of trade for Nigeria, underlining the need for a coordinated international effort to address the issue.
Speaking during an interactive session with maritime journalists on Monday, Mobereola said that there is need for Nigeria to collaborate with international maritime organisations to tackle the entrenched practices that sustain the war risk premium.
“One of the points I raised during my visit to Chatham House is how the War Risk insurance placed on Nigerian bound cargoes can be reduced. It is a cartel that is behind the War Risk insurance premium. They are making so much money from it and will rather leave it the way it is than remove it.
“If Nigeria maintains zero piracy issues on her esters for the next 10 years, they won’t remove the war risk insurance because they are making so much money from it. In all honesty, Nigeria alone cannot do it. We need the international maritime organisations to be with us.
Despite Nigeria’s concerted efforts to curb piracy and enhance maritime security, the war risk premium has not seen a corresponding decrease.
He argued that these premiums, which significantly elevate freight costs for imports and exports, are being artificially sustained by insurers who are well aware of the improved security situation but prefer to maintain the high charges to maximize profits.
To address this menace, he said NIMASA has initiated discussions with key international partners, including taking the matter to the United Nations.
“We’ve engaged them, and we’re taking it to the United Nations. The UN is going to support us, and we will be able to take it to the insurers who will have no choice but to reduce it as well,” he said.
According to him, with the backing of the UN and other international stakeholders, Nigeria would be in a stronger position to challenge the insurers, forcing them to adjust the premiums in line with the actual risk.
On the N50 billion Modular Floating Dock, the NIMASA DG explained that the initial plan for the facility was not the right one.
“The initial plan for the Floating Dock was not the right one. We are going to put the Modular Floating Dock to a very good use so that once its in use, it will be beneficial to the economy, seafarers and NIMASA itself.
“We need to place the Modular Floating Dock in an appropriate place. It is just a matter of time, we will soon get that done,” the NIMASA DG stated.
