In a bid to stop the bleeding of scarce foreign exchange, the Federal Government (FG) through the Nigerian Maritime Administration and Safety Agency (NIMASA), has launched an aggressive campaign to eliminate war risk insurance on Nigeria-bound cargo.
War risk insurance (WRI) is an additional surcharge imposed by international shipping companies on cargo bound for Nigeria.
This financial burden was initially introduced during the height of Niger Delta militancy and piracy.
“Although 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, Protection and Indemnity (P&I) insurance, and other foreign insurance firms”, according to a statement by NIMASA.
It comprises two key components: war risk liability, which 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. 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.
Recognizing the severe economic implications of this financial burden, the statement pointed out thet the Nigerian Maritime Administration and Safety Agency (NIMASA) under the leadership of Dayo Mobereola has launched an aggressive campaign to eliminate war risk insurance on Nigeria-bound cargo.
The statement stated further that the “NIMASA Act and the Merchant Shipping Act mandate the agency to promote shipping development, and removing the WRI premium has become a central focus of its maritime reforms. The security concerns that originally justified these premiums no longer exist
NIMASA: FG moves to stop paying War Risk Insurance premium
