The Nigerian Maritime Administration and Safety Agency (NIMASA) has launched a renewed push to eliminate War Risk Insurance (WRI) premiums imposed on Nigeria-bound cargo, a move that could save the country over $400 billion annually.
War risk insurance is an additional surcharge imposed by international shipping companies due to perceived security threats. The charge consists of two components: war risk liability, covering people and goods aboard vessels, and war risk hull, covering the vessel itself. Originally introduced during periods of high piracy in the Niger Delta, WRI premiums have remained in place despite significant improvements in Nigeria’s maritime security.
Recent data indicates that Nigeria has paid over $1.5 billion in WRI premiums to international insurers, including Lloyd’s of London and Protection and Indemnity (P&I) insurance firms, within the past three years. The economic burden is substantial, with Very Large Crude Carriers (VLCCs) valued at $130 million incurring surcharges of approximately $445,000 per voyage, while new container vessels valued at $150 million face costs rising to $525,000 per voyage.
Under the leadership of Dr. Dayo Mobereola, NIMASA has intensified efforts to remove these additional costs. The agency argues that the security concerns justifying the premiums no longer exist. Nigeria has not recorded any piracy incidents in over three years, and in 2021, the International Maritime Bureau (IMB) delisted the country from its piracy-prone list. Furthermore, in 2023, the International Bargaining Forum (IBF) removed Nigeria from its list of high-risk maritime nations.
To reinforce maritime security, Nigeria has made substantial investments, including the implementation of the Deep Blue Project, which has maintained piracy-free waters for over 30 consecutive months. Additionally, the International Maritime Organization (IMO) has commended Nigeria’s commitment to securing the Gulf of Guinea.
Despite these achievements, international insurers and shipping companies continue to impose high WRI premiums, prompting NIMASA to escalate its advocacy efforts at global forums.
Determined to end what it describes as an unfair financial burden, Dr. Mobereola has engaged key international stakeholders, including Chatham House, where discussions with Dr. Alex Vines of the Africa Programme led to an agreement to escalate the issue to the United Nations.
NIMASA has also held discussions with global shipping organizations such as:
– BIMCO (Baltic and International Maritime Council)
– The International Chamber of Shipping (ICS)
– INTERCARGO (International Association of Dry Cargo Shipowners)
– INTERTANKO (International Association of Independent Tanker Owners)
During these engagements, Dr. Mobereola emphasized that Nigeria has significantly enhanced maritime security and should not be unfairly penalized with excessive insurance premiums. Stinne Taiger Ivø, Deputy Secretary General of BIMCO, acknowledged Nigeria’s progress, stating that shipowners should take the lead in pushing for lower premiums. Similarly, Zhou Xianyong of INTERCARGO assured NIMASA of support in advocating for Nigeria’s removal from war risk insurance premium zones.
Recently, NIMASA met with a Danish delegation led by Kristin Skov-Spilling from the Danish Ministry of Foreign Affairs, urging Denmark to advocate for reducing WRI premiums. With Maersk Line—a major Danish shipping company—playing a crucial role in global shipping, NIMASA believes that Denmark’s influence could encourage other shipping companies to reconsider their premium structures.
Dr. Mobereola and his team have successfully brought global attention to Nigeria’s concerns, but more action is needed. Stakeholders across government, industry, and international organizations are being urged to support Nigeria’s call for the removal of these unjustified premiums.
“Nigeria has met its obligations by securing its waters and eliminating piracy. Yet, foreign insurers continue to profit while Nigerian businesses and consumers bear the costs,” a NIMASA statement read.
With sustained momentum, Nigeria hopes to convince the global shipping community to remove the WRI premiums, strengthening its position as a competitive maritime and trade hub.