We’re working to exit Nigeria from ‘war risk insurance’ countries’ list– NIMASA DG

By Cross Udo, Abuja

The Nigerian Maritime Administration and Safety Agency (NIMASA), yesterday said efforts were on to reduce the huge cost of importation for Nigerians as a result of the country’s classification as a war risk zone.

Director-General of NIMASA, Dr Bashir Jamo, disclosed this when he featured on the weekly ministerial briefing organised by the Presidential Communication Team at the Presidential Villa, Abuja.

He explained that Nigeria-bound cargo has been expensive because of the War Risk Insurance levied by foreign shipping lines.

Jamo also disclosed that the entire international waters region known as the Gulf of Guinea, part of which Nigeria belongs, had been certified to be free of piracy activities in the last year.

He said that the positive development of zero-piracy development is a ground on which Nigeria is seeking to end the war risk tag.

The NIMASA boss, who was accompanied to the briefing by other senior officials of the agency, disclosed that payment of War Risks Insurance has been going on for 25 years, as a result of the insecurity in the Gulf of Guinea, but noted that with the recent safety record in the region, ships coming into Nigeria waters do not need to be obligated to it.

According to him “Nigeria is being made to pay a high premium for every cargo that is coming into the country or going out of the country and under the trade situation in Nigeria, which we are import dependent; 90% of what we consume, we import it. So, it’s hell in escalating the prices of goods and services that we are receiving that are connected to shipping.

“So, the main reason for payment of this War Risk Insurance was that Nigeria is being tagged as the most dangerous water you have to trade on. When your ship is coming to Nigeria, first of all, you have to pay the insurance of the vessel in the event, anything happens to that vessel; the insurance company will have to pay the entire vessel.

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“Two, you have to pay for the valuables that are inside that ship, you have to pay the insurance of those valuables. In the event, the criminals attack the vessel, enter the vessel, and cart away the properties in the vessel.

“So, all those properties are insured. Then the human element, all the workers there, must be insured. In the event, they are killed or they are kidnapped and they have to pay a ransom. So, we have to pay.”

On the level of safety achieved for ships moving into and around the Gulf of Guinea, Jamo said “in June 2021, Mr. President commissioned that Deep Blue Project, and what is the result? You can see the result; in 2017, we recorded 43 attacks or incidents; in 2018, we had 82; in 2019, we had 61; in 2020, we had 81; in 2021, it went down to 34.

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Jamo also disclosed that the disbursement of the long-awaited $350m cabotage funds will commence with the inauguration of the special committee next week by the Minister of Finance, Budget, and National Planning, as 11 banks have been shortlisted for the purpose.

The Cabotage Vessel Financing Fund (CVFF), is an intervention fund created to help the development of indigenous shipping capacity in Nigeria

He disclosed that 11 banks have been shortlisted to disburse the fund, sourced from 2% contribution by indigenous ship owners from every contract executed in the nation’s waters.

The disbursement of the CVFF is backed by the provisions of Section 42(1)-(2) of the Cabotage Act 2003, enacted to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in domestic coastal shipping.

He also said that the National Seafarers Development Programme, one of the agency’s initiatives targeted at building capacity in the maritime sector, had produced 2,041 cadets since its kickoff in 2009.

According to him, 800 of the graduating cadets had secured placements in various maritime establishments globally, lamenting, however, that 120 of the cadets were withdrawn from the programme while 10 died in training.

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Explaining why many of the graduates of the programme had rather gone to look for employment with foreign shipping companies, Jamo said NIMASA could not employ the teeming cadets because there are no local fleets available to absorb them.

According to him, the non-disbursement of the Cabotage Vessel Financing Fund has made it difficult for indigenous players to enter into the shipping business meant to absorb the NSDP cadets.

Since 2007, several Ministers of Transportation and heads of NIMASA have promised to disburse the CVFF to empower indigenous ship owners to acquire vessels.

Speaking on NIMASA’s achievements, he disclosed that the agency remitted N30b into Federation Account in the first half of 2022,