Nigeria’s maritime sector continues to shoulder a heavy financial burden paying over $1.5 billion in War Risk Insurance premiums over the past three years—despite achieving a major security milestone of zero piracy incidents in its coastal waters.

This was disclosed in the latest bulletin released by the Sea Empowerment and Research Centre (SEREC), which called attention to the ongoing classification of Nigerian waters as “high-risk” by international insurers.

According to the research group, the country pays an estimated $500 million annually in war risk surcharges imposed by global shipping firms, even though piracy along the Gulf of Guinea has been effectively curbed, thanks to Nigeria’s Deep Blue Project.

“It’s an economic injustice. We’ve recorded no piracy for three consecutive years, yet we’re still being penalised as though we’re in a conflict zone,” said Eugene Nweke, Head of Research at SEREC.

War Risk Insurance, typically used to cover vessels navigating conflict-prone or high-threat maritime corridors, includes coverage for vessel damage (War Risk Hull) and crew and cargo (War Risk Liability). Despite Nigeria’s improved security profile, insurers have not updated their risk assessment, leading to what SEREC described as an “outdated and punitive” surcharge.

SEREC clarified that while claims of Nigeria losing up to $400 billion annually from these charges may appear exaggerated, the figure likely reflects potential economic opportunities lost due to higher shipping costs and reduced competitiveness.

While commending the Deep Blue Project for restoring security across Nigeria’s maritime domain, SEREC raised concerns over the long-term financial sustainability of such efforts. Nweke argued that some of the massive investment in maritime security might have had greater long-term returns if channeled into areas like fisheries, port infrastructure, or inland logistics.

“Imagine the developmental strides we could make if even part of these funds were directed towards upgrading ports or boosting local food production,” the bulletin noted.

SEREC also acknowledged ongoing efforts by agencies such as the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Shippers’ Council (NSC), which are advocating for the removal of the war risk surcharge altogether. These agencies argue that continuing to treat Nigeria’s waters as high-risk not only distorts insurance pricing but also drives up the cost of imports and consumer goods.

The group urged the Federal Government to step up diplomatic engagement with international insurance underwriters to ensure a fair reassessment of Nigeria’s maritime risk status.

“Insurers must align their pricing with Nigeria’s current reality. We cannot continue to pay for risks that no longer exist,” Nweke said.

SEREC also praised the Ministry of Marine and Blue Economy for sustaining the Deep Blue Project and ensuring that Nigeria remains a regional leader in maritime security.

In conclusion, the research group maintained that while the cost of achieving maritime safety has been high, the long-term benefits including safer trade routes, improved investor confidence, and regional stability are significant. However, the continued imposition of unjustified insurance premiums risks undermining these gains and must be urgently addressed to unlock the full value of Nigeria’s maritime reforms.