NIMASA seeks international support to tackle insurance cartel behind war risk premiums on Nigerian cargoes

The Director General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dayo Mobereola, has revealed that a powerful cartel within the international insurance sector is behind the high war risk insurance premiums charged on Nigerian- bound cargoes.

Speaking at an interactive session with the maritime media in Lagos on Monday, Mobereola stated that the agency is seeking the support of international maritime organizations to compel the insurance companies to reduce the premium.

He noted that despite a significant reduction in piracy and sea robbery incidents in Nigerian waters, the persisting premium has continued to add to the cost of trade for Nigeria.

He said, “One of the points I raised during my visit to Chatham House is how the war risk insurance placed on Nigerian-bound cargoes can be reduced.

“It is a cartel that is behind the war risk insurance premium. They are making so much money from it and will rather keep it as it is than remove it.

“Even if Nigeria maintains zero piracy on her waters for the next ten years,if we don’t force the issues they will continue to charge us. They won’t remove the war risk insurance because they are making so much money from it.”

Mobereola noted that Nigeria alone cannot challenge the insurers, but with the support of international maritime organizations and the United Nations, the country can compel them to reduce premiums in line with actual risk.

“In all honesty, Nigeria alone cannot do it. We need the international maritime organisations to be with us to meet these insurance companies, ” he said.

In addition to addressing the war risk insurance issue, Mobereola assured that NIMASA is working to address the limitations of Certificate of Competency (COCs) and Officer of the Watch (OOW) certificates.

He added that efforts are ongoing to put the modular floating dock into use to generate revenue and employment.

“The initial plan for the floating dock was not the right one. We are going to put the Modular Floating Dock to very good use so that once it’s in operation, it will benefit the economy, seafarers, and NIMASA itself. We need to place the modular floating dock in an appropriate location. It is just a matter of time; we will soon get that done.”

Regarding the Cabotage Vessel Financing Fund (CVFF), Mobereola said the agency is carefully planning its disbursement to avoid past mistakes experienced during the defunct Ship Acquisition and Ship Building Fund (SASBF) and ensure benefit to the Nigerian shipping industry.

According to him, the CVFF, which is currently with the Federal Government, will be disbursed to deserving shipowners to support shipping development in Nigeria.

He explained that the CVFF fund is not only about acquisition of vessels but the demand for steady supply of cargo for the vessels to carry.

“You’ll recall 25 years ago when some of these resources were disbursed, they were lost. They were given to the wrong people. There was no benefit to the nation and the ship owners who were contributing to it.

“So in this case, we are looking for opportunities to ensure that when we start the disbursement of CVFF, it will be for the benefit of shipping promotion in Nigeria and it will not be a start and stop. It will be something that wil help us to continually develop the sector. So it is those strategies we are working and looking at,”he said.

Mobereola assured that NIMASA is working on fine-tuning the modalities for disbursement and will inform the industry once completed.