NIGERIAN ports are some of the most expensive in the West African region, no thanks to the numerous fees paid on Nigerian-bound cargoes, reports the Punch daily of Lagos.
The maritime industry has experienced a significant increase in war risk insurance premiums in recent years, particularly for Nigerian-bound shipments.
This trend is driven by a confluence of factors, including geopolitical instability, piracy, and terrorism, particularly in the Gulf of Guinea, where Nigeria's ports are major hubs for global trade.
As the cost of war risk insurance continues to rise, stakeholders in the global supply chain - shippers, insurers, and importers - are feeling the pressure as it pertains to the causes, impacts, and implications of these premium increases.
According to the International Maritime Bureau, piracy off the coast of Nigeria and surrounding waters has been a significant threat to global shipping.
Since 2018, piracy incidents in the Gulf of Guinea, which includes Nigerian waters, have contributed to higher insurance costs. Insurers classify these regions as 'high-risk', requiring additional premium charges.
A report by the International Union of Marine Insurance indicates that in 2020, war risk premiums for Nigeria-bound shipments had risen by 20-30 per cent compared to previous years, mainly due to the worsening piracy activities and threats from armed groups operating along the Nigerian coast.
In 2015, premiums began rising in response to increased piracy incidents in the Gulf of Guinea. Between 2018 and 2019, the situation worsened, with Nigeria experiencing an uptick in piracy, kidnappings, and other violent activities, pushing premiums higher.
In 2020, it experienced 25 per cent increase due to political instability, militant activities in the Niger Delta, and maritime insecurity. It continued to rise in 2021-2023, with some shipping firms reporting increases of up to 35 per cent for high-risk zones, especially along the Nigerian coast.
By 2023, premiums rose as high as US$50,000 to $100,000 for a single voyage, depending on the size of the cargo and the specific route taken.
As one of Africa's largest economies and a major oil exporter, Nigeria plays a crucial role in global maritime trade. However, the soaring cost of war risk insurance has placed a burden on both international shipping lines and Nigerian importers.
According to the World Bank, the increase in insurance premiums has had a ripple effect on Nigeria's overall shipping costs. In a recent analysis, the bank noted that shipping costs to Nigerian ports had risen by an average of 15 per cent from 2020 to 2023, contributing to inflationary pressures on the economy.
SeaNews Turkey
The maritime industry has experienced a significant increase in war risk insurance premiums in recent years, particularly for Nigerian-bound shipments.
This trend is driven by a confluence of factors, including geopolitical instability, piracy, and terrorism, particularly in the Gulf of Guinea, where Nigeria's ports are major hubs for global trade.
As the cost of war risk insurance continues to rise, stakeholders in the global supply chain - shippers, insurers, and importers - are feeling the pressure as it pertains to the causes, impacts, and implications of these premium increases.
According to the International Maritime Bureau, piracy off the coast of Nigeria and surrounding waters has been a significant threat to global shipping.
Since 2018, piracy incidents in the Gulf of Guinea, which includes Nigerian waters, have contributed to higher insurance costs. Insurers classify these regions as 'high-risk', requiring additional premium charges.
A report by the International Union of Marine Insurance indicates that in 2020, war risk premiums for Nigeria-bound shipments had risen by 20-30 per cent compared to previous years, mainly due to the worsening piracy activities and threats from armed groups operating along the Nigerian coast.
In 2015, premiums began rising in response to increased piracy incidents in the Gulf of Guinea. Between 2018 and 2019, the situation worsened, with Nigeria experiencing an uptick in piracy, kidnappings, and other violent activities, pushing premiums higher.
In 2020, it experienced 25 per cent increase due to political instability, militant activities in the Niger Delta, and maritime insecurity. It continued to rise in 2021-2023, with some shipping firms reporting increases of up to 35 per cent for high-risk zones, especially along the Nigerian coast.
By 2023, premiums rose as high as US$50,000 to $100,000 for a single voyage, depending on the size of the cargo and the specific route taken.
As one of Africa's largest economies and a major oil exporter, Nigeria plays a crucial role in global maritime trade. However, the soaring cost of war risk insurance has placed a burden on both international shipping lines and Nigerian importers.
According to the World Bank, the increase in insurance premiums has had a ripple effect on Nigeria's overall shipping costs. In a recent analysis, the bank noted that shipping costs to Nigerian ports had risen by an average of 15 per cent from 2020 to 2023, contributing to inflationary pressures on the economy.
SeaNews Turkey
