Despite marking three consecutive years without a single piracy incident on vessels headed to Nigeria through the Gulf of Guinea, the country has lost more than $1.5 billion in war risk insurance premiums paid to foreign insurers.....KINDLY READ THE FULL STORY HERE▶

Despite recording three consecutive years without any piracy attacks in the Gulf of Guinea, Nigeria continues to lose over $1.5 billion in War Risk Insurance premiums to foreign insurers, according to the Sea Empowerment and Research Centre (SEREC).

SEREC’s Head of Research, Eugene Nweke, disclosed in the centre’s latest bulletin that Nigeria still pays an estimated $500 million annually in war risk surcharges imposed by international shipping lines—even with the success of the Deep Blue Project, which has significantly improved maritime security.

“This is an unnecessary financial burden that no longer reflects the current realities of our maritime environment. Nigeria has gone three years piracy-free, yet we’re still being penalised with high-risk insurance labels. This must stop,” Nweke stressed.

The bulletin explained that War Risk Insurance—originally introduced to protect vessels traveling through conflict zones—remains in effect long after the original threats have been neutralised. The premium is made up of two key components: War Risk Liability (covering cargo and crew) and War Risk Hull (covering the vessel itself).

While some estimates claim Nigeria could save up to $400 billion annually if the surcharge is removed, SEREC clarified that this figure likely reflects broader economic gains rather than a direct correlation with the $1.5 billion spent in the past three years. “The connection between the $500 million annual payment and the projected $400 billion in savings isn’t linear. More precise figures would need updated input from agencies like NIMASA,” Nweke noted.

He also questioned the opportunity cost of maintaining high maritime security funding. While commending the Deep Blue Project’s achievements, he argued that resources spent on sustaining maritime security could have been redirected into sectors like port upgrades, logistics infrastructure, or fisheries—areas essential to trade and food security.

“Consider what could be achieved if those funds were channelled into fisheries or transport logistics, both of which have significant potential to transform our economy,” the bulletin noted.

SEREC urged the Nigerian government to escalate diplomatic pressure on global insurers, advocating for an urgent review of Nigeria’s maritime risk classification. It acknowledged efforts by regulatory bodies such as the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Shippers’ Council (NSC), which have campaigned for the removal of the war risk surcharge. These agencies argue that continued surcharges inflate shipping costs and ultimately raise the prices of goods.

“Insurers must align their policies with the present-day security landscape. Continued economic penalisation for a non-existent threat is unjustifiable,” SEREC maintained.

The group also applauded the Minister of Marine and Blue Economy for providing strategic leadership in sustaining the Deep Blue Project, which has helped boost Nigeria’s global maritime reputation.

SEREC concluded that while the costs of ensuring maritime security are considerable, the long-term gains—such as improved trade, investor confidence, and regional stability—far outweigh the expenditures. However, it insisted that Nigeria must urgently challenge the lingering insurance surcharges to fully capitalise on its maritime security reforms.