By Aisha Saleh
The Nigeria Maritime Administration and Safety Agency (NIMASA) has spent over N150 billion to end the practice of “War Risk Insurance” on Nigeria-bound cargoes, according to industry reports.
The cost of the contract awarded by NIMASA for Deep Blue Project, Valuechain learnt, was $195 million, including a 10 per cent management fee and other auxiliary expenses made by the agency.
War risk insurance covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. Some policies also cover damage due to weapons of mass destruction. It is used in the shipping and aviation industries.
It has two components, namely war risk liability, which covers people and items inside the craft and is calculated based on the indemnity amount; and war risk hull, which covers the craft itself and is calculated based on the value of the craft.
The premium varies based on the expected stability of the countries to which the vessel will travel, the war risk phenomenon, which was only known to countries with high rate of piracy such as Somalia, also found its way into Nigeria following massive involvement of youths in militancy in the Niger Delta.
According to the Oceans Beyond Piracy’s 2020 report, the total cost of war risk area premiums incurred by Nigeria-bound ships transiting the Gulf was $55.5 million in 2020 alone, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance, totaling $100.7 million.
Some measures taken by the apex maritime agency, findings have shown, have led to the drastic fall in piracy incidence in the waters and the Gulf of Guinea in the last two-quarters, which operators said, calls for celebration.
NIMASA was able to achieve the feat based on its deployment of the Integrated National Security and Waterways Protection Infrastructure, popularly known as the Deep Blue Project, under the leadership of the Director-General of the apex maritime regulatory agency, Dr. Bashir Jamoh.
In a chat with reporters on the sidelines of the fifth plenary of the Gulf of Guinea (GoG) Maritime Collaboration Forum(MCF) in Abuja, Jamoh expressed happiness over the removal of the War Risk Insurance on the cargoes, calling on Nigerians and the international community to continue to support the agency in its drive to make the nation’s territorial waters and the Gulf of Guinea save for shipping and maritime business.
He said the achievements recorded in maritime safety were based on the huge amount of money and time invested by the Federal Government through the agency on maritime architecture and the partnership between NIMASA, the Nigerian Navy and other regional bodies.
His words: “No one can easily forget the frequent reports of attacks on ships and the kidnapping of seafarers in the Gulf of Guinea in 2019 and 2020 when they reached their peak and the attendant negative economic effects on the sea-borne trade in the region.
“But today, the IMB has not only affirmed that piracy is at a 28-year all-time lowest in the region, Nigeria, which once seemed the worst culprit has been taken off its Red List even as we celebrate almost two-quarters of zero attacks in 2022.
“While it is important to recognize success so far made, the future must however be the focus.”
