The Nigerian Maritime Administration and Safety Agency (NIMASA) has launched a campaign to eliminate war risk insurance premiums on Nigeria-bound cargo, which currently costs the country over $400 billion annually.
This financial burden was initially introduced during the height of Niger Delta militancy and piracy, but with Nigeria’s improved security status, NIMASA is pushing for the removal of these excessive premiums ¹.
War risk insurance (WRI) comprises two key components: war risk liability and war risk hull. Despite Nigeria’s progress in securing its waters and eliminating piracy, international shipping companies continue to impose WRI premiums on Nigeria-bound cargoes.
In the past three years alone, Nigeria has paid over $1.5 billion to Lloyd’s of London, Protection and Indemnity (P&I) insurance, and other foreign insurance firms.
NIMASA’s efforts to mitigate WRI premiums include significant investments in maritime security through initiatives like the Deep Blue Project, which has successfully eliminated piracy in Nigeria’s waters for over 30 consecutive months.
The agency has also engaged major global shipping organizations, including BIMCO, the International Chamber of Shipping (ICS), INTERCARGO, and INTERTANKO, to support the removal of WRI premiums.
Reducing these premiums is critical for Nigeria’s competitiveness in global trade. Lower shipping costs will encourage more international trade, attract foreign investment, and strengthen Nigeria’s position as a leading blue economy player.
With NIMASA’s efforts, it’s time for all stakeholders to support the removal of this unjustified premium.
