Tag Archive for: Nimasa

Japan Grants Nigeria N910m for Speed Boats

The quest to make the maritime industry and trade in Nigeria safer continues to receive International support. According to the latest news reports the government of Japan has promised a ¥300 million (about N910m) grant to the federal government to procure high-speed boats to assist with protecting the Gulf of Guinea from piracy.

Speaking at the signing ceremony of the exchange of notes for the economic and social development program in Abuja, the Ambassador of Japan to Nigeria, Matsunaga Kazuyoshi, noted that the security of the region is important to deepen the $1bn annual trade relationship between Nigeria and Japan, adding that the route serves as a facilitator of goods traded between the two countries.

“The security of the Gulf of Guinea is of vital importance not only to Japan and Nigeria but to the whole of West Africa. The cooperation between our two countries will serve as a good example to support the self-sustaining economic and social development of African countries,” he said.

The Director-General of NIMASA, Dr. Bashir Jamoh, said the high-speed boats would help to reinforce coastal security in the Gulf as over 60 percent of shipping activities in Africa pass through Nigerian waters.

Read the full story here.

Arete recently reported that Nigerian Maritime Administration and Safety Agency (NIMASA) had received two unmanned aircraft systems, nine interceptor patrol boats, and ten armored vehicles to enhance maritime security in the country as part of the Deep Blue project. Read more about it here.

Nigeria’s Deep Blue Project Receives New Assets

The Nigerian Maritime Administration and Safety Agency (NIMASA) has received two unmanned aircraft systems, nine interceptor patrol boats, and ten armoured vehicles to enhance maritime security in the country as part of the Deep Blue project.

The Director-General of NIMASA Dr. Bashir Jamoh, while thanking President Buhari for his sustained support in the fight against sea piracy and other maritime crimes, said the additional equipment will improve on the gains recorded in securing the Gulf of Guinea and the Nigerian maritime domain.

The DG also praised the recently held Gulf of Guinea Maritime Collaboration Forum (GOG-MCF/SHADE) in Abuja as a success in rallying international support for the suppression of maritime insecurity and added that Nigeria’s commitment to regional maritime security will always be sustained.

Dr. Jamoh said: “Nigeria is improving on her capacity to fight maritime crime by procuring state-of-the-art technology, upgrading human capacity for effective service delivery and deployment of the assets for round-the-clock patrol, interdiction, and reconnaissance with the support of Nigerian Navy and other security agencies we signed MoU.

“Indeed, we are further encouraged by President Muhammadu Buhari’s support all the time to ensure adequate security of crew members, vessels, and cargoes within and around our waters.

These newly procured assets would assist us in building on the gains already recorded in the fight against piracy, sea robbery, oil theft, kidnapping, illegal fishing activities, and others.” Read the full news article here.

Arete earlier announced that in order to support the fight against maritime crime and other security challenges in the region, the European Union (EU) donated security hardware valued at €5million (euros), including 30 rigid-hull inflatable boats and forensic equipment to Nigeria and other countries in the Economic Community of West African States (ECOWAS).  Read the full article here.

NIMASA Determined to Remove War Risk Insurance Surcharge

On 15 November, Mr. Ubong Essien, Special Assistant on Communication and Strategy to the Director-General of NIMASA, disclosed that NIMASA remains committed to achieving the lifting of the War Risk Insurance (WRI) Additional Premium, often referred to as a ‘surcharge’, imposed on international shipping operating in part of the Gulf of Guinea by the Joint War Risk Committee. (JWRC)

In September 2021, Arete reported the same ambition still being held by the Director-General of NIMASA, Dr. Bashir Jamoh, despite a rebuff by the JWRC following a previous lobbying attempt by NIMASA in June.  The position of NIMASA is premised on the apparent reduction in piracy and other acts of maritime criminality in Nigerian and littoral waters of other Gulf of Guinea states.  

While the piracy figures in the region have indeed fallen in 2021 compared to previous years, there are many variables and numerous underlying factors that may explain the drop in the number of reported piracy incidents other than an increase in regional maritime security.  Arete published its own analysis of these factors, including a review of the current rate and intensity of maritime criminality in the region, in October 2021, you can read it here.

The key issue behind the drive to remove the surcharge is the economic impact on Nigeria’s macro-economic situation, as shipping operators seek other options other than to use/enter Nigeria’s congested ports.  Additionally, the inflationary pressure felt in the domestic markets as suppliers pass on the additional costs of shipping goods into the country is significant.

The rapid response by the JWRC to Nigeria’s previous lobbying in June 2021 reflects the conservative position of the Committee. The JWRC is a grouping of underwriting representatives from the Lloyds Market and other insurance underwriters’ associations.  The body meets quarterly to represent the interests of marine hull insurance business and identifies so-called ‘Hull War, Piracy, Terrorism and Related Perils Listed Areas’.  Listed Areas are defined as those areas where risks are elevated to the point where additional insurance cover is required to protect shippers against those risks.

The Committee sets the Listed Areas purely for business reasons and does not have any political or security function.  This is an important point as it means the Committee’s decisions are purely pragmatic and driven by metrics.  What that means for Nigeria is that although the country has invested heavily in securing its territorial waters, the strong evidence that acts of piracy outside those waters, in the EEZ and beyond, are still being carried out by Nigerian organised crime groups (OCGs) generates a view that there remains a latent risk inside Nigerian waters.  Furthermore, the listed area encompasses the territorial waters and EEZs of other littoral states in the region.  It is unlikely that the JWRC will lift the Listed Area status for Nigerian waters when Nigerian gangs continue to prey on shipping in neighbouring states’ waters.

Arete sources reported that in the last two weeks the Nigerian Senate approved the borrowing of a further $16 billion by the Federal Government, $1 billion of which will go into defence and security budgets.  It is hoped that some of this will trickle down to projects and procurement programs aimed at defeating maritime criminality in the region.  However, the extensive, diverse, and relentless instability onshore is possibly of greater priority – or certainly of a higher profile at the moment.

While it is evident that the Nigerian Government has serious intentions of dealing with the threats in the Gulf of Guinea, there remains much work to be done onshore to defeat the fundamental drivers of the criminality that pervades the region’s waters.  Meanwhile, the JWRC will seek evidence that the apparent reduction in maritime crime is genuine and sustainable before any real prospect of lifting the Listed Area status of the Gulf of Guinea is likely.  For now, Dr. Bashir Jamoh’s ambitions will likely remain just that, with little prospect of any substantial change. 

However, there is a possibility that a political initiative might move the problem forward.  In 2010, a new form of maritime crime emerged.  Several cartels operating out of Nigeria began extended hijackings of oil products tankers and chemical tankers for the purpose of extended cargo theft in ship-to-ship transfers.  The stolen cargo was being sold into storage tank farms in Nigeria and elsewhere in Africa.  This very lucrative criminal enterprise continued until early 2014 when the US government revealed to the Nigerian Government that it had detailed and accurate intelligence on the identities of the criminals behind the trend.  It was suggested in media reporting at the time that the list of names included people close to the government.  The practice of hijacking tankers and stealing of cargoes ended almost overnight.  

Perhaps if the economic cost to the country caused by piracy in the region is deemed to be sufficiently damaging, the Federal Government might exert the same pressure that shut down the cargo theft cartels.  This would be a game-changing step forward for Mr. Jamoh and Nigeria.

War Risk Insurance – NIMASA expresses optimism

In June we reported that NIMASA had requested the international maritime community to remove, or reduce, war risk insurance on Nigeria bound cargos.

This week, the Director General of NIMASA, Dr. Bashir Jamoh, met with the Executive Secretary of the Nigerian Shippers’ Council (NSC), Hon. Emmanuel Jime, and stated that he believed the continued reduction in maritime incidents seen over the last few months should lead to the removal of the insurance premiums and in an official statement following the meeting he noted that “…the sharp decrease in maritime incidents logged in IMB’s second quarter report was a valuable feedback on the NIMASA’s campaign for Nigeria’s delisting from countries under the war risk insurance burden”.

With the initial statement on the subject from NIMASA in June, Lloyds List released a response soon after stating that there were currently no plans to amend this premium and at this time we await further international response to this latest statement from the DG of NIMASA.

Worth note is while the DG referred to the IMB Q2 report for 2021 piracy showing a decline in incidents compared to 2020, Q2-Q3 have historically shown a lower rate of incidents in Nigeria due to natural factors such as weather conditions etc. and thus the international community may well need to see evidence of a decline in piracy in Nigeria for at least the next 6 months before considering any re-classification.

The removal of this insurance would obviously have huge benefits to everyone involved in the maritime trade in Nigeria (according to the non-profit Oceans Beyond Piracy’s 2020 report, the total cost of additional war risk area premiums incurred by Nigeria-bound ships transiting the Gulf was $55.5m in 2020 alone.), however any removal will likely only be predicated upon a corresponding drop in the risk of pirate attack.  We will continue to monitor for further updates.

You can read more on the meeting and statement here – NIMASA anticipates end to War Risk Insurance