NIMASA sets to engage insurance firms over war risk levy

Dr Dayo Mobereola, the Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), has stated that the agency would be partnering with foreign insurance companies to address the issue of war risk insurance placed on Nigerian bond cargos by shipping companies.

Mobereola revealed this on Tuesday in Lagos during the 2024 Stakeholders Engagement on enhanced activities in the blue economy sector organised by the Ministry of Marine and Blue Economy.

He wondered why Nigeria would be compared to Sudan and Somalia when there had not been a war in Nigeria since 1966.

“Of course, we want the maritime space to be clean, safe, and, most importantly, secure. You spoke about war risk insurance, and I like the discussion that we are going to sit together and approach the insurance companies, the likes of the Lloyds Insurance Company and many of them and ask them questions as to why we are being compared to Sudan and Somalia when there has not been a war in Nigeria since 1966, and why are they charging us on the same premium,” he noted.

Mobereola expressed confidence that engagement with the insurance firm would yield positive results.

The NIMASA boss also promised that the agency would ensure that something serious was done about the Cabotage Vessels Financing Funds before the end of the year so as to make them accessible to practitioners.

“The funds have been there in our own quest. It has been dumped because it is not being used for the purpose of why it has been contributed and why it has been contributed. So, before the end of this year, I am sure we can assure you that a lot will be done in this area,” he said.

He added that the agency was working to ensure the creation of ship-to-ship zones to avoid cargo diversion to neighbouring countries.

“NMASA is working on creating STS zones, which will be made public very soon. The bunkering business, again, we are fully aware of it. We are working towards it and we would work with you in order to make our business a domesticated business so that our vessels are not going to be going to Lombe, Takoradi and so far to go and bunker when we are capable of doing these businesses here,” Mobereola stated.

Earlier, the Minister of Marine and Blue Economy, Adegboyega Oyetola, said the gathering was to discuss and interact with a view to shaping the future of Nigeria’s maritime sector.

Oyetola, represented at the event by the Director of Safety and Security at the ministry, Babatunde Bombata, mentioned that there was a need to recognise the significance of the marine and blue economy sector in stimulating national economic growth and development.

According to Bombata, shipowners and operators are the backbone of the maritime sector, contributing to trade, transportation, and job creation.

“We acknowledge the challenges you face, from safety and security concerns to regulatory hurdles and market fluctuations. It is the resolve of the government to address these challenges and foster a conducive environment for your operations,” he averred.

The former Osun State governor added that the efforts of the government to enhance efficiency, transparency, and competitiveness in the sector were already yielding positive results.

“The NIMASA Act has promoted safety standards, enforced regulations, and boosted investors’ confidence. We are exploring fiscal and trade policies to promote greater participation of Nigerians in the shipping industry.

Oyetola added, “A major part of the plan is to unlock the Cabotage fund for disbursement to support the growth and development of shipping businesses in the country. The Ministry is committed to delivering this soonest,”.

War risk insurance is a type of insurance that covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking.

It is most commonly used in the shipping and aviation industries. Some policies also cover damage due to weapons of mass destruction.

According to reports from nonprofit Oceans Beyond Piracy’s 2020, the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf of Guinea was $55.5m in 2020, and 35 per cent of ships transiting the area also carried additional kidnap and ransom insurance totalling $100.7m.