Troops of the Spanish Navy board and secure the heavy lift ship Blue Marlin after a pirate attack in the Gulf of Guinea (Armada Española)
Authorities in Nigeria are pressing for the elimination of war risk insurance, which is required for cargo ships calling at the country because of the piracy threat in the Gulf of Guinea.
Nigerian Maritime Administration and Safety Agency (Nimasa) director-general Bashir Jamoh has urged the international shipping community to cut the premiums, claiming the country has shown enough commitment to address maritime insecurity in its territorial waters and the Gulf of Guinea fight. “We therefore invite the international shipping community to reconsider the issue of war risk insurance for cargo destined for our ports,” he said.
He added that the recent launch of the Integrated National Security and Waterways Protection Infrastructure, also known as the Deep Blue Project, is a clear commitment that Nigeria is addressing the threat of piracy along its coasts.
As part of the project, Nigeria has invested US $ 195 million in the acquisition of military and law enforcement infrastructure to secure its maritime domain along the Gulf of Guinea, an area ravaged by piracy, armed robbery and other maritime crimes.
“Since the deep blue project resources were deployed in February, there has been a steady decline in piracy attacks in Nigerian waters every month,” noted Jamoh.
Although piracy is declining in the country’s waters, Nigerian authorities claim that marine insurers are still insisting on very high premiums for ships carrying cargo into Nigeria. Oceans Beyond Piracy’s 2020 report shows that the total cost of additional war risk area premiums paid by ships in Nigeria that crossed the Gulf of Guinea was $ 55 million in 2020, compared to 35 percent of ships that crossed the Gulf of Guinea crossed the area, carrying an additional $ 100 million kidnap and ransom insurance.
War risk insurance is a type of insurance that covers damage resulting from acts of war, including invasion, insurrection, rebellion, and kidnapping. It consists of two components: war risk insurance, which covers people and property inside the vehicle and is calculated based on the amount of compensation, and war risk insurance, which covers the vehicle itself and is calculated based on the value of the vehicle. The premium depends on the expected stability of the countries to which the ship will travel.
West Africa has become the global hotspot for piracy, with the International Maritime Bureau recording 90 attempted and successful attacks in 2020. In the first three months of this year, the Gulf of Guinea was responsible for almost half of all reported piracy incidents (43 percent). ).
The total economic cost of piracy in West Africa was estimated to be a staggering $ 2.3 billion over the three-year period from 2015 to 2017, representing an annual loss of nearly $ 800 million.