NIMASA is leading an effort to eradicate war risk insurance premiums on Nigeria-bound cargo, which have cost Nigeria over $1.5 billion in three years. With the decline of piracy incidents and international commendation for maritime security improvements, there is a call for the global shipping community to adjust these excessive financial burdens. Diplomacy is being employed to advocate for this change while emphasizing Nigeria’s security advancements and economic needs.
The Nigerian Maritime Administration and Safety Agency (NIMASA) is actively campaigning to eliminate war risk insurance premiums on cargo destined for Nigeria, given the significant economic burden it presents. War risk insurance comprises two aspects: liability coverage for people and goods aboard vessels, and hull coverage for the vessels themselves. The imposition of these premiums originated during a period marked by piracy and militancy in the Niger Delta, and Nigeria has reportedly spent over $1.5 billion in the past three years on such coverage, which hampers economic growth significantly.
Under the leadership of Dr. Dayo Mobereola, NIMASA has taken substantial steps to address this onerous financial burden. The agency’s mandate, supported by the NIMASA Act and the Merchant Shipping Act, prioritizes shipping development, specifically advocating for the removal of war risk insurance premiums. With three years free of piracy incidents and Nigeria’s recent removal from piracy risk lists by international bodies, the justification for these premiums has effectively eroded, calling into question their ongoing applicability.
In efforts to reduce these premiums, Nigeria’s Ministry of Marine and Blue Economy, along with the Ministry of Defense, has invested substantially in maritime security initiatives like the Deep Blue Project. This program has reportedly eradicated piracy in Nigerian waters for over thirty consecutive months. NIMASA has received accolades from organizations such as the International Maritime Organization (IMO) for these unprecedented achievements; however, international shipowners and insurance firms continue to impose high premiums.
Dr. Mobereola has engaged with various international stakeholders, striving to garner support for the removal of these unjustified premiums. His diplomatic initiatives include discussions with prominent global shipping associations, encouraging them to recognize Nigeria’s improved security status and alleviate the financial burdens faced by domestic businesses and consumers. Support from figures such as BIMCO’s Deputy Secretary General acknowledges Nigeria’s strides towards maritime safety, advocating for lower insurance costs.
A recent meeting with a Danish delegation showcased NIMASA’s commitment to engaging countries that have vested interests in shipping, suggesting that countries like Denmark could influence major shipping firms to reconsider their stance on insurance premiums. As Nigeria stabilizes its maritime security, the continued imposition of war risk insurance premiums by foreign firms stands as a significant impediment to Nigeria’s competitive advantage in global trade. Stakeholders are urged to unite in advocating for the removal of these premiums, recognizing Nigeria’s fulfillment of its security obligations and the unsustainable nature of ongoing financial penalties.
In summary, NIMASA’s initiative to eliminate war risk insurance reflects a necessary response to the changing security landscape in Nigeria. With piracy incidents greatly reduced, international acknowledgment of Nigeria’s maritime safety should prompt a re-evaluation of the war risk premiums imposed on shipping to the country. Collective efforts among government, industry, and international organizations are crucial to dismantle these financial barriers that hinder Nigeria’s growth in global trade. The pressing need for reform highlights that the time for action is now.
Original Source: www.thisdaylive.com
