The Nigerian Maritime Administration and Safety Agency (NIMASA) has revealed that Nigeria has paid over $1.5 billion in war risk insurance (WRI) premiums to international insurers over the past three years, describing it as an enormous financial burden that the agency insists must end.
In a statement released at the weekend, Osagie Edward, NIMASA’s Head of Public Relations, emphasized the staggering economic impact of these premiums on the nation. War risk insurance, commonly used in shipping and aviation, covers losses from war, invasion, rebellion, piracy, and hijacking. For years, international shipping companies have imposed WRI surcharges on Nigeria-bound cargoes, significantly increasing trade costs.
“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,” the statement read.
The financial strain on Nigeria’s economy remains alarming. According to NIMASA, the surcharge for a Very Large Crude Carrier (VLCC) valued at $130 million is approximately $445,000 per voyage, while for new container vessels valued at $150 million, the cost rises to $525,000 per voyage. Even leading shipping giants such as Maersk have introduced additional transit disruption surcharges of up to $450 per container, while others impose a war risk surcharge of $40–$50 per 20-foot container.
NIMASA insists that the conditions that initially warranted these charges no longer exist, as Nigeria has made significant strides in maritime security, achieving a piracy-free status since 2021. “The security concerns that originally justified these premiums no longer exist. Nigeria has not recorded a single piracy incident in over three years, and in 2021, the International Maritime Bureau (IMB) officially removed Nigeria from its list of piracy-prone countries,” Edward stated.
Despite these security advancements, international shipping companies continue to impose war risk insurance premiums on Nigerian cargo, a situation NIMASA insists must change. “Over the past five years, NIMASA, in collaboration with the Nigerian Navy, has led an unprecedented crackdown on piracy in the Gulf of Guinea, earning global recognition from the International Maritime Organization (IMO),” the statement read.
Even as Nigeria was delisted as a high-risk maritime nation by the International Bargaining Forum (IBF) in 2023, the WRI surcharge remains in place. “With piracy no longer a concern, why has the international shipping community continued to impose these excessive premiums?” Edward questioned.
To push for the removal of war risk insurance premiums, NIMASA has engaged global stakeholders, including Chatham House, the United Nations, BIMCO, and INTERCARGO, urging them to recognize Nigeria’s progress.
Edward further highlighted the role of Nigeria’s Deep Blue Project under the Ministry of Marine and Blue Economy, which has ensured over 30 consecutive months of piracy-free waters. Additionally, Arsenio Dominguez, Secretary-General of the IMO, has publicly commended Nigeria’s efforts in securing the Gulf of Guinea, further reinforcing the argument that war risk insurance premiums should be abolished.
With Nigeria making substantial security improvements, NIMASA is determined to end the financial drain of WRI premiums, which it estimates could save the country over $400 billion annually. As Nigeria fights for fairer global trade conditions, the maritime industry awaits a decisive shift from the international shipping community to acknowledge Nigeria’s security progress and remove unjustifiable surcharges.