Businesses hope for cost reduction as piracy on Nigerian waters drops 36%
Importers, exporters and ship owners are optimistic of reduction in freight charges, war risk insurance premium and other surcharges imposed on Nigerian-bound cargo if pirate attacks on Nigerian waters continue to decrease.
The optimism comes on the back of the first quarter piracy report released by the International Maritime Bureau (IMB), a specialised department of the International Chamber of Commerce, showing 36 percent reduction in pirate attacks on Nigerian waterways.
According to the report, Nigeria, which has been a hotspot for piracy incidents over the past decade, experienced a decrease in reported piracy incidents as it recorded 14 incidents in Q1 2019 against 22 incidents reported same period in 2018.
“These results confirm the Nigerian Navy’s increased efforts to actively respond to reported incidents by dispatching patrol boats,” the report notes.
Adewale Ishola, foremost master mariner, told BusinessDay in a telephone interview that the development is supposed to boost shipping business because safety is very critical to shipping.
According to him, international shipping companies that are raising freight charges and introducing new surcharges on cargoes coming to Nigeria need to consider bringing rates down to benefit ship owners and shippers.
“Nigeria is the chair for Gulf of Guinea commission and we must be seen to be playing leadership role. There are lots of collaboration between the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Navy, Nigerian Air Force and Nigerian Army that are yielding good result,” he said.
Ishola blamed the surge in piracy attacks recorded previously on the gap created between 2015 and 2018, when the Federal Government terminated the contract between NIMASA and the Global West Vessel Specialist, which centred on policing the nation’s territorial waters.
“Now, NIMASA has an Israeli company policing the nation’s maritime domain and it is now yielding good result. We hope the attacks will come down to zero very soon,” Ishola said.
Findings show that Gulf of Guinea, which houses Nigerian waters, is rated as a high-risk area for vessels calling seaports in West Africa with international cargoes. This is as even the IMB report, despite the drop in pirate attacks, expressed scepticism that Nigerian waters remain risky for vessels, especially the port of Lagos where four incidents have been reported in 2019.
As a result, vessel owners charge war risk insurance premium on cargoes coming to Nigerian ports and other ports in the region. Most vessels also come into the region with armed escort for the protection of the cargoes and the cabin crew onboard.
Hadiza Bala Usman, managing director, Nigerian Ports Authority (NPA), said the war risk insurance premium has translated into high cost of cargo importation into the nation’s seaports as importers, who pay such premium, also increase the market price of goods.
Two shipping lines, Hapag-Lloyd and CMA CGM, operating in Nigeria recently introduced new surcharge called ‘Peak Season Surcharge’ (PSS) on all cargoes originating from anywhere in the world to Tin-Can and Apapa ports in Lagos and Onne port in Rivers State.
Dakuku Peterside, director-general of NIMASA, attributed the development to Federal Executive Council’s recent approval of the Deep Blue Project, an all-encompassing maritime security architecture, which is a clear demonstration of the present government’s determination to tackle the menace of piracy.
“The IMB report is not a surprise considering how seriously the Federal Government is paying attention to maritime safety and security, which led to the approval of the Deep Blue Project. This is the best time to invest in Nigerian maritime sector,” he said.
Peterside said NIMASA would continue to collaborate with the Nigerian Armed Forces, the Police and other relevant law enforcement agencies to ensure that Nigeria becomes a hub of maritime business in Africa.
“We will continue to do all in our powers, within the ambit of the law, to ensure that piracy in Nigerian territorial waters is drastically reduced, if not eradicated,” he said.
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