Newly released figures show Nigeria’s comatose insurance sector may finally be waking up. By Martins Azuwike in Lagos.

As plans are revealed for a new skyscraper in Lagos, Martins Azuwike discovers Nigeria's commercial hub could soon be a byword for luxury living.

The Nigerian economy is not actually growing unless GDP outstrips population growth, says economist Muda Yusuf.

As new figures reveal a collapse in pirate activity off Nigeria, authorities are demanding an end to the War Risk Insurance Premium on imports. By Francis Ezem in Lagos.

The federal government of Nigeria is currently pushing for the abolition of the controversial War Risk Insurance Premium for all ships entering the country through the Gulf of Guinea.

The drive to scrap the ‘piracy tax’ follows the successful deployment of the country’s maritime forces under the Integrated National Security and Waterways Protection Infrastructure – better known as the Deep Blue Project – which has helped reduce crew kidnappings across the region by more than 90 per cent, according to the latest figures.   

The premium is a type of insurance that covers damage due to acts of war, including invasion, insurrection, rebellion and hijacking. It has two components: war-risk liability, which covers people and items inside the ship, and is calculated based on the indemnity amount.

The second component is the war-risk hull, which covers the vessel itself and is calculated based on the value of the craft.

The premium varies depending on the expected stability of the countries to which the vessel will travel, but the premium is associated with increased cost of living, as shipping companies are forced to claw back the cost from importers, driving up food and fuel prices.  

Originally enacted in 1914 by the United States Congress to cover the cost of sunken merchant shipping during the First World War, the policy was resurrected in 2017 by Western-based shipping lines and insurers on all Nigeria-bound vessels and crew in reaction to increasing piracy in the Gulf of Guinea region.  

With piracy now dramatically curtailed, experts believe the time has come for the premium to be scrapped.  

Recent piracy figures released by the Malaysia-based International Maritime Bureau (IMB) showed a drastic reduction in the number of attacks and kidnappings in the Gulf of Guinea in the first three quarters of 2021, ending September 30.

Nigeria, for example, only reported four incidents of piracy in the first nine months of 2021, the most up-to-date figures available, compared to 17 in 2020 and 41 in 2018.  

The IMB also disclosed that the number of crew kidnapped in the region dropped from 50 in the last quarter of 2020 to 10 in the second quarter of 2021, which represents an 80 per cent decline.  

Meanwhile, the figures for the third quarter of 2021 were even more positive, with only one sailor seized in the Gulf of Guinea between July and September 2021; the same three-month period in 2020 saw 31 crew members taken in five separate incidents. 

The fall-off follows a concerted effort by the Nigerian state to fight piracy, sea robbery and other forms of maritime crimes in the country as well as the Gulf of Guinea region.

Chief among this was the Deep Blue Project, for which the Nigerian government has invested over $175 million, and has seen authorities combat piracy from air, land and sea.  

Speaking on the achievement of its anti-piracy initiatives, Michael Howlett, a director at the IMB, commended Nigeria’s efforts at tackling the challenge, adding that reporting all incidents to the regional authorities and the IMB will ensure seafarers maintain pressure on the pirates.  

Yet despite the beefing up of anti-piracy measures, the fall in pirate attacks has not attracted any response from the foreign underwriters or the shipping lines, which has left experts wondering whether the premium was for reasons other than piracy.   

While speaking with the media at the side line of the Seafarers’ Day celebration in Lagos in June 2021, Bashir Jamoh, director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), expressed concern over the continued retention of the premium on Nigeria-bound cargo when the factors that gave rise to its introduction have been addressed.  

He believes there is an urgent need to rethink the policy, given the declining piracy rate in the nation’s territorial waters in particular and the Gulf of Guinea as a whole.   

Nigeria pirate ship

An abandoned Nigerian pirate ship (above).

He also expressed fears that the country’s maritime trade was being threatened due to the increasing War Risk Insurance Premium now being paid by Nigeria-bound vessels, which is ultimately passed down to the final consumers of the imported goods.  

Jamoh said: ‘Stakeholders in Nigeria are worried that though piracy and other crimes on the country’s waters are waning, the offshore underwriting firms still insist on very high premium to be paid by those conveying cargoes to Nigeria.'

‘Since the deployment of the Deep Blue Project assets in February [last year], there had been a steady decline in piracy attacks on the Nigerian waters on a monthly basis. We invite the international shipping community to rethink the issue of War Risk Insurance on cargo bound for our seaports. Nigeria has demonstrated enough commitment towards tackling maritime insecurity to avert such premium burden.’  

He added: ‘Bringing together maritime response authorities through initiatives like Nigeria’s Deep Blue Project and Gulf of Guinea Maritime Collaboration Forum, will continue and strengthen knowledge sharing channels and reduce risk to seafarers in the region.’  

Arrested pirates

Suspected pirates being placed under arrest (above).

Nigeria also enacted the Suppression of Piracy and Maritime Offences Act in 2020, under which 10 pirates have already been prosecuted and jailed.   

But while maritime trade in the region is becoming safer for crews, this is yet to translate into a reduction in insurance costs for the companies involved.  

Available records show that global insurance firm Beazley are having to offer ‘Gulf of Guinea Piracy Plus’, a bespoke insurance plan for maritime crew travelling through the region.

The plan provides compensation for illegal vessel seizures and crew kidnappings even in the absence of ransom demands. It tracks insured vessels on a 24-hour basis and limits its claims to $25 million.   

Captain Emmanuel Ihenacho, CEO, Genesis Worldwide Shipping, one of the thriving indigenous firms, believes that this insurance premium substantially contributes to the spiralling inflation rates in the country.  

Reports by the National Bureau of Statistics (NBS) released in mid-July show that the country recorded its highest rise in inflation over the past four years, which was also around the period the premium was introduced.   

The reason for this spiralling inflation, which stood at over 15 per cent according to figures released in December, owes much to the country’s heavy dependency on imports; Nigeria ships in everything from raw materials to most of its finished and semi-finished goods.  

The total economic cost of piracy in West Africa has been estimated at a staggering $2.3 billion in the three-year period from 2015 to 2017, representing an annual loss of nearly $800 million.  

While reacting to the IMB report, Jamoh described it as a welcome development and also gave the assurance that the agency would not lower its guards in ensuring zero tolerance for piracy on Nigeria’s waters and in the Gulf of Guinea.  

He ascribed the feat to the concerted efforts put in place by the Gulf of Guinea countries and navies, and called for a more holistic approach in quelling the incidences of piracy in the region.  

‘Matters concerning maritime security are everybody’s business as no country has immunity against insecurity and piracy-related offences,’ he said.

‘Crime is usually a step ahead of every organised society, hence the need to step up our game through continuous synergy and enhanced information sharing in the West and Central Africa sub-region.’  

He added that Nigeria will continue to engage the international maritime community to eliminate the premium.  

Experts believe the premium is one of the biggest burdens on the Nigerian economy, which is currently struggling with the effects of national and international lockdowns. 

As Nigerians prepare to vote in gubernatorial elections over the next 12 months, Emeka Chigbu reports how the economic situation couldn’t be more fragile in Africa’s most-populous nation.

President Buhari has launched a new security initiative to end piracy in the Gulf of Guinea. By Francis Ezem in Lagos.

Fifty years after the death of Dick Tiger, Emeka Chigbu talks to the son of the late sporting legend about boxing, Biafra, and how the sportsman’s political views robbed him of a place in the history books.

Nigerians may claim the British heavyweight champ Anthony Joshua as their greatest ever boxing star. In reality, though, that title belongs to another sportsmen, with an equally disputed nationality: Richard Ihetu. 

Popularly known as Dick Tiger, Ihetu rose from very humble beginnings trading empty bottles in Nigeria's old Eastern province, to the pinnacle of the boxing world in the 1950s and 60s, conquering both the middleweight and light heavyweight division.  

Born in 1929 in Nkwerre-Amaigbo in today’s Imo State, Ihetu moved with his family to the ancient city of Aba, where he grew up.  

As a young man his interest in boxing was sparked after Gordy Uzoaro formed a boxing club in the city, which Ihetu joined, quickly excelling in the sport. Richard Ihetu's trajectory in boxing got a boost when he came in contact with renowned British boxing scout and promoter Bobby Diamond, who propelled the young Ihetu from his adopted home of Aba to Calabar, Lagos and finally London. In his path lay several boxing titles, culminating in the British Commonwealth Middleweight Champion belt. 

Dick Tiger.jpg

Ihetu fought over 80 professional bouts, notching up 60 wins, including 27 by knock-out, as well as three draws and 19 losses.

It led Ring magazine to name him Boxer of the Year in 1962 and 1965 while the Boxing Writers’ Association of America declared him Fighter of the Year in 1962 and 1966. World fame, surely, beckoned.  

In 1962, Dick Tiger moved from the Commonwealth Middleweight title into the World Middleweight division and won the World Middleweight title after beating Gene Fuller. In another feat of extraordinary ability, he moved from the middleweight into the light heavyweight division in 1966, and won the World Boxing Association Light Heavyweight title when he defeated Jose Torres. 

But despite rising to the top of his sport at a time when a newly independent Nigeria was trying to make a name for itself on the world stage, the Easterner found himself shunned by his fellow Africans. 

In the heat of the Nigeria-Biafra conflict, Dick Tiger switched allegiance from Nigeria, under whose flag he had fought in the past, identifying with his Igbo race and the breakaway republic of Biafra instead. He was appointed a Biafran ambassador by the separatist government and began to march to ring side bearing Biafra's rising sun tricolour.  

The boxing legend's oldest son, Richard Ihetu Jr, described the move as a ‘diplomatic coup’ by his father, which he did to highlight the 'injustice done to the Igbo' and other Easterners during the Nigeria-Biafra civil war. 

A proud Biafran, his father returned his CBE to Britain, accusing the former colonial power of being unjust in its support of Nigeria, which had been complicit in ‘genocide against his Igbo compatriots residing in their south eastern Nigeria homeland' according to his son. 

It was during the Biafra war, in 1968, that Dick Tiger lost his light heavyweight title to Bob Foster in a knockout – the first knockout loss of his boxing career. Many attributed the loss to the pressure he was under as a result of the conflict. But, according to Ihetu Jr, his father acknowledged that the ‘better fighter’ won on the night.  

Despite such setbacks, Ihetu, who died aged 42 in December 1971, achieved heights no other African has done in professional boxing.

He was the first African to be inducted into the international boxing hall of fame. And in 2002 was voted one of the greatest fighters by Ring magazine, coming in 31st, ahead of global icons including Joe Frazier, Lennox Lewis and Mike Tyson. 

Nigel Collins, editor-in-chief of Ring said: ‘If there was ever a neglected hero who deserved a biography, it is former middleweight/light heavyweight champion Dick Tiger.’ 

It appears that you really can have your cake and eat it as Dick Tiger found out when he became the Middleweight champion of the world. London, England.jpg

Though he attained global fame as a young fighter, Ihetu was a quintessential family man, with a wife and eight children.

And while he never earned big money like today's fighters – Ihetu worked as a security guard at the Metropolitan Museum of Art in New York after retiring from boxing – he managed to develop a portfolio of investments before the outbreak of the Nigerian civil war and eventually used that money to move back to the city where his boxing career began. Some members of his family still reside in Aba today, including his son Richard Ihetu Jr, who laments that the city his father loved so much is yet to recognise and honour his boxing legacy. 

He told NewsAfrica that his father would be disappointed by the ‘poor state of boxing and sports facilities’ in Aba.

Fighters of Nigerian origin may be making waves in global boxing today, but potential home-gown boxing stars have been left largely left 'undiscovered', Ihetu Jr said. 'Boxing clubs no longer exists in the region and up-to-date sports facilities are completely lacking’.  

He questioned how many how many more Dick Tigers the nation could have produced had it invested in young sporting proteges, like the UK did when it propelled Joshua to success as part of its Team GB Olympics squad. Adding that with more than 70 per cent of Nigeria’s 200 million population aged between 18 to 35, the country has the potential to more than punch above its weight on the international stage.

Food safety has come under scrutiny in Nigeria after an alleged poisoning killed 10 people and hospitalised 400 in Kano state.

Residents of Kano state, northwest Nigeria, woke up to the news of a strange illness on March 16, that has left since gone on to leave 10 dead, 400 people hospitalised and at least 50 people suffering kidney-related infections, according to latest reports.

Most of the victims, thought to have been poisoned after consuming a flavoured powdered drink, were from six villages in the Rogo local government area of the state. The victims were reportedly rushed to the area’s primary health centre after passing excessive blood urine and vomiting.

The situation got worse as local healers and medicine stores were overwhelmed in some of the rural communities, including Unguwan Rijiyan Dadi, Gwanwan Gabas, Gwangwan Yamma, Unguwar Tsarmai, Gangare and Unguwar Kofar Fada.

But the country’s food regulatory body, the National Agency for Food, Drug Administration and Control (NAFDAC), has insisted there is no cause for concern, saying many of the products had been mopped up from the various local markets in the affected areas.

Professor Mojisola Adeyeye, Director General of NAFDAC, also disclosed that the alleged merchants of the dangerous drinks had been apprehended. Adeyeye assured that the agency would stop at nothing to ensuring that only safe food and other regulated products were available in the market for consumption and use.

She said that the preliminary result of the agency’s investigation had been submitted to Kano’s state governor, Abdullahi Ganduje, during her two-day visit to Kano to assess the incident.

She added that the alleged ‘merchants of the deadly chemicals and additives had been apprehended while further investigation continued’.

Despite such assurances, there are fears that the problem of food poisoning might affect food security, not only in Kano State but also across the federation, if adequate care was not taken to nip this problem in the bud.

Proponents of this school of thought have argued that, given the fragile nature of Nigeria’s food supply chain, such incidents might hamper food safety and security in the country if not promptly addressed.

The Commissioner for Health, Dr Aminu Tsanyawa, gave an update on the emergency situation at the end of April, revealing that the death count had risen from three to 10.

She also disclosed that an additional 50 people that consumed the flavoured drink were undergoing kidney-related checks at various hospitals. At the time of press, the total number of people thought to have been hospitalised by the drinks stood at 400.

But food experts insist that the poisoning in Kano was an isolated case that affected only a few local government areas and not even the entire state.

Speaking anonymously, a top official at one of the multi-national food companies located in Lagos said that the issue of food safety or security does not arise in this instance since it happened in a few towns in Kano.

‘The issue of recent food poisoning in Kano is just an isolated case and cannot be generalised to affect food safety and security,’ said the source. ‘Such fears should have been genuine if it extended to other cities or states in the country.

‘But a more germane issue is for NAFDAC to speed up the process of inspecting food premises for licenses and permits, which are currently fraught with delays caused by corruption on the part of some officials, who demand kickbacks before the necessary documents are processed, especially for small- and medium-scale enterprises.’

Some experts have also fingered the high inflation rate in the country, which has placed popular food and drink brands beyond the reach of average citizens, as a causative factor.

They argue that since many cannot afford the popular brands, they tend to resort to the cheaper brands, which have a higher propensity to be associated with poisoning.

As a new Netflix documentary puts illegal fishing under the spotlight, Britt Collins reveals the devastating impact China – and the EU’s – supertrawlers are having on Africa’s coast.

While West Africa has been pre-occupied with the pandemic, its waters have been secretly plundered by Chinese trawlers.

Though Chinese and European supertrawlers have been moving untracked in the continent’s seas for decades, taking advantage of the weak government enforcement, encroachment has intensified over the past few years, exhausting wild fish stocks, polluting the continent’s waters and seriously threatening food insecurity for poor coastal communities.

‘Africa’s waters have become a free-for-all,’ said Ali Tabrizi, the British filmmaker whose hit Netflix documentary Seaspiracy uncovered shocking revelations about the multi-billion-dollar seafood industry.

‘West Africa is home to one of the last strongholds to life in our oceans, teeming with rare marine wildlife, a refuge for mating and feeding. These massive trawlers are like floating slaughterhouses.

China, in particular, is invading the waters of other countries without detection and stealing the fish.’ 

‘Since the WHO declared Covid-19 as a pandemic, we've assisted our government partners around the continent of Africa to arrest 17 vessels for illegal fishing, three in Benin, two in Gabon, six in the Gambia and six in Sierra Leone,’ said Captain Peter Hammarstedt, the director of campaigns at Sea Shepherd, a global marine conservation charity.

‘Of those vessels, all but one were either flagged to the People’s Republic of China or had beneficial ownership [there].’

The plundering of the African coastline is just the continuation of centuries of exploitation of the continent’s natural resources.


Subsidised Chinese and European Union (EU) fishing fleets are cornering one of the most pristine, wildlife-rich seas, wiping out countless fish species and killing thousands of dolphins and whales as bycatch.

About 200 of Europe’s taxpayer-funded fleets are currently prowling its shores, via the EU’s opaque ‘Sustainable Fishing Partnership’ agreements – denounced by politicians as little more than license to steal from some of the most impoverished communities on earth.

The EU, alongside Japan and China, is one of the world’s top three fishing subsidisers.

These massive government incentives given to an industry keep prices artificially low that means local business can’t compete. 

Without subsidies, these distant-water fleets wouldn’t be economically viable. 

Long accused of ‘looting’ Africa for oil, precious metals and the endangered wildlife its safari industry relies on – rhinos, elephants, lions — China is by far the worst offender of illegal fishing, plundering the continent’s seas with its vast armada of super trawlers (pictured below in Zhoushan, China, in 2011).

In the belly of the beast - Trawlers in Zhoushan, China, August 4, 2011.jpg

Just one of these industrial trawlers can have a colossal impact, capturing over 12,000 tons of fish a week – more than twice the sustainable catch for a country like Liberia, Mauritania or the Gambia. 

As the world’s biggest seafood exporter, China accounts for more than a third of all global fish consumption.

Having long exhausted the dwindling reserves in the South China Seas, the Chinese fleets have been moving further out to sea in recent years to exploit the distant waters of other nations, particularly along the West African coast. It has forced out local fishermen and ravaged the region’s once-abundant stocks.

Captain Paul Watson, environmental activist and founder of the Sea Shepherd Conservation Society, warned that the crisis in West African waters will have dire implications for the entire planet.

‘We’re strip-mining life from the sea. Marine eco-systems are collapsing and that will lead to the inability of oceanic eco-systems to support life on this planet.’ 

What this massive die-off means for the future, he said, ‘is a rise in piracy by impoverished African fishermen just like the situation in Somalian waters. It will mean a rise in poverty and starvation in these affected countries and it will lead to social chaos and possibly violent revolution.’ 

Fisherman off West African coast.jpg

West Africa, with its rich marine biodiversity, is a hotspot for what is known in the industry as Illegal, Unreported and Unregulated (IUU) fishing.

Europe and Asia have been benefitting at the expense of some of the poorest nations, where enforcement tends to be weaker as governments lack the resources to police their waters.

Such illegal fishing is estimated to cost West African countries about $2.3bn each year. IUU fishing in West Africa accounts for 40 percent of all illegal fishing globally.

Senegal, which has an exclusive economic zone of around 200 nautical miles (370km) teeming with a diversity of species from sharks, tuna and swordfish, is one of the African states most targeted by foreign pirate fishing fleets from Europe and Asia. 

The Sea Shepherd Conservation Society has taken on a daring mission to end this.

The international non-profit, set up in 1977 by Paul Watson, one of the co-founders of Greenpeace, focuses on the protection of marine wildlife using aggressive yet non-violent tactics, that have shut down hundreds of illegal operations. 

In a sweeping effort to crack down on trespassing foreign vessels and illicit activities, Sea Shepherd has partnered with eight African coastal and island states to conduct joint at-sea patrols.

Recently, in less than two days, armed Sierra Leone Navy sailors stationed on board the Sea Shepherd ship Bob Barker carried out a series of at-sea raids on illegal fishing vessels in the waters of Sierra Leone, detaining five trawlers, almost all of them Chinese-flagged, for fishing without a license or in the inshore exclusion zone reserved for artisanal fisherman.

As Captain Hammarstedt explained: ‘Sea Shepherd provides a vessel that operates as a civilian offshore patrol vessel along with fuel and a ship's crew. The government partner provides the law enforcement agents with the authority to board, inspect and arrest illegal operators.

'Offenses range from fishing without a license or in a prohibited area (either a marine park or an inshore exclusion zone reserved for artisanal fishers) to fishing using prohibited gear; to the taking of endangered species such as sharks and rays; and to other convergence crimes, such as fraud, forgery and tax evasion.

'To date, 68 vessels have been arrested through these partnerships.’

Coastguard Boarding-Hai-Lung-017_R0A0823 (HR).jpg

Seaspiracy star and director Ali Tabrizi joined the Sea Shepherd during one of their sea patrols off the west coast of Africa and documented the illegal fishing on an industrial scale in his vivid exposé.

‘West Africa is like a gold rush for countries, especially China, where they’ve already depleted their own local stocks, and are using more and more sophisticated technologies. It’s here that the intersection of wildlife loss, international corruption and human impact are most clearly seen.’

Lamya Essemlali, the French-Moroccan campaign coordinator and president of Sea Shepherd France, believes West Africa’s fisheries are at serious risk of collapse from the Chinese fleets. 

‘It’s the area of the world most targeted by illegal fishing. Most of the fish stolen from Africa ends up on the plates of much richer countries that otherwise applaud themselves for the crumbs of charity that they throw to African nations.

‘Countries like Senegal do not need charity, but rather the kind of justice possible only through effective law enforcement patrolling.’ 


Some African countries are starting to assert themselves.

Senegal and Liberia’s decision to deny fishing permits to Chinese industrial trawlers last year marked a turning point in the region. But incursions by Chinese supertrawlers are getting more frequent and aggressive.

Trawlers are destroying the coral reefs that aquatic animals rely on to live and breed, and, in the process, contributing to ocean acidification, warmer seas and reduced oxygen levels in the water. 

Severe overfishing and destruction of the reefs is also ravaging coastal communities that depend on these waters for their livelihoods and survival.

‘The fishermen, who’ve lived here since time immemorial, are starving,’ said Tabrizi.

‘They’re risking their lives going further out in the ocean in small canoes, without life vests, because the illegal commercial fishing vessels are scooping up all the fish. West African canoe fisherman now have the highest mortality rate of any job on the planet.’ 

Unloading the catch at Kayar, Senegal's largest fishing harbour. Alamy.jpg

Such intensive fishing operations are not only wiping out the fish, but also destroying economies, according to the film director.

‘One of the causes of the Somalian pirates was actually illegal fishing. They were once humble fishermen working to feed their families. But when Somalia fell into civil war, foreign fishing vessels, the real pirates of the ocean, invaded their waters and began taking fish, giving Somali fisherman no choice but to move into another line of work.’ 

Interestingly, the EU likes to boast about its role in monitoring and thwarting unregulated fishing in the region, but it continues to be part of the problem.

With its multibillion-euro fish subsidies paid for by the bloc’s taxpayers, it helped create the Somali pirates.

As the Somalian civil war broke out and warlords scrambled to rule, the longest coastline in continental Africa, at over 2,000 miles (3,300 km), was unprotected, and illegal foreign trawlers moved in, stealing millions of tonnes of fish.

Even before the country collapsed in 1991, foreign vessels were routinely encroaching on their coast to fish.

The piracy started off as a protest against foreign fleets coming in and trying to take back control of their waters.

Beyond Somalia, the effect of foreign trawlers on the indigenous African fishing industry has been catastrophic, with over half the fish stocks along the coast between Nigeria and Senegal categorised as ‘overfished’.

There are also widespread reports of local fishing nets being cut by foreign trawlers, who unload their enormous catch directly onto container ships where they are transported back to Europe or Asia, bypassing inspections. 

West African governments have been urged to band together to protect millions of Africans and their fragile economies from the ceaseless onslaught.

According to Tabrizi, the key lies in ending harmful subsidies, which he said is ‘propping up one of, if not the most, destructive industries on earth – to the tune of $35bn a year. It’s unacceptable, especially as, according to the United Nations, $30bn would solve world hunger.’ 

A committed vegan, Tabrizi believes the single most effective thing individuals can do to protect the reefs from trawlers is to stop eating fish and seafood.

It’s a view echoed by the Sea Shepherd’s Paul Watson, who added: ‘There’s no such thing as sustainable fishing. The amount of fish being taken out of the ocean is absolutely stunning, five million fish a minute.’


Foreign liners may continue to enjoy exclusive rights over Nigeria’s crude oil exports. But, as Francis Ezem reports, Nigerians may soon be able to get in on the act.

Nigeria is the world’s sixth largest producer of crude oil, extracting an estimated 2.7 million barrels a day before the pandemic cut demand and prices alike. But more than 60 years after the launch of commercial oil production, the country is yet to benefit from the equally lucrative business of actually shipping the crude oil it generates.

Oil accounts for the majority of Nigeria’s exports and foreign exchange earnings, but the shipping of oil has, inexplicably, remained an exclusive honey pot only available to foreign tanker owners.

The reason is Nigeria’s adoption of a so-called Free on Board (FOB) trade policy, under which a seller – such as the Nigeria National Petroleum Corporation – has an obligation to deliver goods on board a vessel designated by the buyer.

Under FOB rules, the seller is only responsible for any loss or damage up to the time of shipment, with the shipping company assuming liability in case of a spill or sinking during export.

Such deferred risk may have served the fledging country well when it was still finding its feet in the 1960s and 1970s.

But experts say Nigeria’s shipping industry would grow much faster, creating a lot more jobs and boosting much-desired foreign exchange inflows, if it switched to the riskier yet more lucrative Cost, Insurance and Freight (CIF) model, which is currently used on non-oil imports, such as agricultural products.

Under FOB trade terms, Nigeria has no reasonable control over the delivery of its crude oil in terms of carriage, insurance and other ancillary services.

Under the CIF arrangement, however, the country will maintain ample control over the distribution of crude oil, which can be leveraged to enhance the competitive advantage of indigenous shipping operators.

Yet successive governments have not shown sufficient political will to reverse these trade policies, through which the country has lost huge sums of revenue needed to develop its fledging economy.

Statistics show that in 2019, Nigeria retained only five per cent of the $5 billion annual freight earnings that accrued to the country through shipment of oil and gas and other marine-related activities, while 95 per cent went to foreign shipping companies.

Records also show that more than 5,307 vessels call at Nigeria’s eight seaports annually and none are indigenously owned, due to the FOB and CIF policies.

It was in a bid to curtail these staggering economic losses that the Nigerian Maritime Administration and Safety Agency (NIMASA) initiated talks with the NPPC to reverse the policy. Bashir Jamoh, Director General of NIMASA, said that the CIF model would help develop indigenous shipping capacity as well as boost foreign exchange inflows, which the country needs to stem the worsening rate of capital flight and depleting foreign reserves.

‘Since 2018, NIMASA has championed moves for a review in the terms of trade with regards to shipment of Nigeria’s crude oil, from FOB to CIF, to ensure greater benefits for the country from its oil resources,’ revealed Jamoh.

‘A technical committee involving NIMASA, NNPC and other stakeholders would be set up to develop a template for the desired change, with workable timelines.’

Captain Emmanuel Iheanacho, who is chairman of the petroleum marketing firm Integrated Oil and Gas, as well as the managing director of Genesis Worldwide Shipping, said that by using FOB policy for Nigeria’s oil export and CIF for all imports, the country loses in all the three components of the trade, thereby creating wealth and job opportunities for foreign countries.

According to him, Nigeria loses in terms of the freight components of the trade, through which lots of wealth and job opportunities would have been created for the country by engaging indigenous ship owners.

‘Nigeria also loses because it does not have the refining capacity, which would have also been a huge source of wealth creation for the economy.

‘Another area of loss to the country in the crude oil trade business is in the importation of the refined petroleum products, which foreigners also determine and control the shipment to the detriment of indigenous shipping companies.’

Umar Aminu, President of Nigeria Shipowners’ Association (NISA), believes that successive governments in the country have not shown sufficient political will to review the policy imposed by foreign ship owners.

He said that Nigeria remains the only member of OPEC that does not participate in the lifting of the crude and until this is reversed, the vast economic benefits in terms of job creation and foreign exchange inflows would continue to be elusive.

It was in a bid to curtail these confounding economic losses that the Nigerian Maritime Administration and Safety Agency (NIMASA), which had made unsuccessful efforts in the past, commenced fresh moves to reverse the policy.

Dr. Bashir Jamoh, Director General of the agency, who made the disclosure, insists that shipment of Nigeria’s crude oil exports based on CIF as against the current FOB, is more beneficial to the country, as it would help develop indigenous shipping capacity as well as boost foreign exchange inflows, which the country needs to stem the worsening rate of capital flight and depleting foreign reserves.

Under the current moves, the Director-General has initiated talks with Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation NNPC, and Billy Okoye, the Group General Manager, Crude Oil Marketing Division of the corporation.

Jamoh notes that Nigeria has for too long implemented the FOB policy for shipment of crude oil exports, which weighs against its economy.

‘Since 2018, NIMASA has championed moves for a review in the terms of trade with regards to shipment of Nigeria’s crude oil, from FOB to CIF to ensure greater benefits for the country from its oil resources. A technical committee involving NIMASA, NNPC, and other stakeholders would be set up to develop a template for the desired change, with workable timelines,’ Jamoh stated.

He also said that Nigeria would not derive maximum benefit in terms of creating wealth and job opportunities until it adopts the CIF trade term for the carriage of its crude exports.

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