With the Gulf of Guinea privacy threats in mind, Nigerian officials are doubling their efforts to dispose of the war risk insurance claimed by cargo ships calling on the country.
Basir Jamoh (Director General, NIMASA) acknowledges the desire of the international shipping community to limit premiums. "We, therefore, invite the international shipping community to rethink the issue of war risk insurance on cargo bound for our ports," he said. The country has done a tremendous amount of service and demonstrated enough responsibility to address the insecurity in its regional waters across the Gulf of Guinea.
The launch of Integrated National Security and the Deep Blue project, which covers water protection infrastructure, clearly demonstrates efforts to mitigate the piracy threat, according to Basir.
According to reports, Nigeria invested $195 million in this project to build a military and legislative infrastructure to protect its maritime domain.
"Since the deployment of the deep blue project assets in February, there has been a steady decline in piracy attacks in Nigerian waters on a monthly basis," Jamoh noted.
Officials in Nigeria insist that, despite the fact that pirates are no longer a threat to the country's territorial waters, marine insurers are continuing to demand high premiums. According to the 2020 Oceans Beyond Piracy report, Nigeria-bound ships incurred additional war risk area premiums worth $55 million for passing through the Gulf of Guinea. Moreover, 35% of the total ships passing through that area had an additional $100 million worth of kidnap and rescue premiums.
Incursion, insurrection, rebellion, and hijacking, or any other kind of war damage, are all covered under war risk insurance. There are two components of war risk insurance: war risk liability and war risk hull. The former accounts for people and items inside the vessel and are computed by interpreting the indemnity amount, whereas the latter covers the vessel as a whole, and is calculated based on the vessel's worth. The insurance varies depending on the expected stability of the bound country to which the ship will sail.
In 2020, Western Africa appeared as the worldwide hot spot for piracy, with reports from the IMB suggesting 90 successful attempted attacks. In the initial 3 months of the year, the Gulf of Guinea accounted for 43% of the total reported piracy events.
In the 3 year span (2015-17), West Africa reported a substantial total economic cost worth $2.3 billion. These estimated figures symbolized a loss of approximately $800 million.