The Federal Competition and Consumer Protection Commission (FCCPC) and the Economic and Financial Crimes Commission (EFCC) have pledged to strengthen their collaboration to protect Nigerian consumers from exploitation.
This commitment was made during a courtesy visit by the executive vice chairman/chief executive officer of the FCCPC, Tunji Bello, to the executive chairman of the EFCC, Olanipekun Olukoyede, at the EFCC headquarters today.
Bello expressed concern over the increasing cases of arbitrary price hikes, emphasising the need for a joint effort to address the issue.
He commended the EFCC’s expertise in surveillance and investigation and sought its support in combating these unfair trade practices.
In response, Olukoyede acknowledged the challenges faced by consumers and assured the FCCPC of the EFCC’s full cooperation.
He emphasised the importance of a strong partnership between the two agencies in creating a fair and equitable market for Nigerian consumers.
Both agencies agreed to intensify their joint efforts to protect consumer rights and bring perpetrators of economic crimes and unfair market practices to justice. Olukoyede designated Bello as an Ambassador to the EFCC.
This is coming barely a week after FCCPC announced its desire to engage market leaders across the country to curb the exploitative pricing of consumer goods.
United Capital Group, has successfully led the issuance of Sierra Leone’s first local currency corporate bond, valued at SLE32 million ($1.4 million).
This milestone signifies a transformative moment for Sierra Leone’s capital market. Acting as the Financial Adviser, United Capital through its investment banking business, provided bespoke structuring, financial advisory, and fundraising services to the Issuer, LAPO SL. The Issuer is a microfinance institution serving micro, small, and medium enterprises (MSMEs) in Sierra Leone, with a significant focus on providing affordable loans to women from low-income households.
Managing director, Investment Banking at United Capital Group, Dr. Gbadebo Adenrele said, “we are pleased to have advised LAPO SL on this landmark transaction. It not only strengthens the corporate bond framework but also deepens the Sierra Leonean capital market. At United Capital, we are committed to enhancing the capital market ecosystem across Africa through active participation in innovative transactions like this.”
He stated that this bond issuance is a significant step in United Capital’s broader strategy to expand its footprint across the African capital markets.
The Group CEO, United Capital, Peter Ashade, emphasised the pan-African impact of this transaction saying “this successful corporate bond issuance in Sierra Leone is a testament to our strategic focus on expanding United Capital’s presence across Africa.
“By leveraging our expertise and resources, we are unlocking new opportunities and driving economic growth across the continent. Our goal is to empower corporates and sovereign governments with tailored financial solutions that transcend borders and foster prosperity throughout Africa.”
The transaction was a collaborative effort involving key financial institutions including Invest Salone (a UK-funded private sector development programme) and Pennarth Greene (a Sierra Leonean-based corporate finance advisory firm), underscoring a collective commitment to developing the bond market in Sierra Leone.
The Africa Local Currency Bond Fund (ALCB Fund) served as the anchor investor, injecting approximately SLE27 million into the transaction, further signaling strong interest in Sierra Leone’s burgeoning economy.
United Capital Group’s pivotal role in this transaction highlights its capacity to lead and manage significant capital market activities across borders. Its track record includes leading major listings like the Transcorp Power IPO on the Nigerian Exchange (NGX), which boasted a market capitalisation of N1.8 trillion, reaffirming its position as a key player in Africa’s financial landscape.
Minister of Aviation and Aerospace Development, Festus Keyamo has led a high-profile delegation to Helsinki, Finland, and Vienna, Austria, for critical factory inspections and familiarisation meetings with two of the world’s leading aviation infrastructure equipment manufacturers, Vaisala and Frequentis AG for the supply of infrastructural equipments for the construction of the on-going Abuja second runway.
The delegation included the managing director of the Nigerian Airspace Management Agency (NAMA), Engr. Faruk Ahmed Umar; the director-general of the Nigerian Meteorological Agency (NiMET), Prof. Charles Anosike; and the Director of Engineering, Federal Airports Authority of Nigeria (FAAN), Engr. Abiola Adejare.
Special adviser to the minister, Tunde Moshood, in a statement, said this important visit was initiated by the managing director of Avsatel, Georg Eder MBA, and his deputy, Engr. Abdullahi Bayi, alongside the project’s chief consultant on Airfield Lighting (AFL), NavAids, Communications, and Meteorology, KEFE Engineering Limited, Engr. Mohammed Sodiq.
The statement stated that the first stop for the Nigerian delegation was in Helsinki, Finland, where they inspected the weather radar at Helsinki Airport.
This was followed by a comprehensive meeting with the management and a visit to the manufacturing plant of Vaisala OYJ, the world’s largest developer and manufacturer of meteorological equipment.
The delegation was received by Vaisala’s Mauri Vapola, Application Manager; Juha Salmivaara, R&D Manager; and Kimmo Rustolainen, Director for MEA for Central Asia and Ukraine.
The Nigerian delegation was then given a tour of the meteorological equipment at Helsinki Airport, providing valuable insights into the operational efficiency and technological advancements of the equipment.
The delegation’s next stop was Vienna, Austria, where they met with the management and visited the manufacturing plant of Frequentis AG, a global leader in voice communication and control systems for air traffic management.
There is a need for collaboration and innovation among banks and fintechs to drive financial inclusion at the last mile, says PalmPay.
Giving the advice during the Nigeria Fintech Forum held recently in Lagos. The head of Partnerships, PalmPay, Chibuzor Melah said, the burden of financial inclusion lies with banks and fintech.
The event themed ‘Building the Next Frontiers for Nigeria’s Fintech,’ brought together key stakeholders from both the public and private sectors, including regulators to discuss the rapid advancements in Nigeria’s financial technology industry.
Speaking on a panel session that discussed: ‘Rewriting the rules: Building an open, innovative and collaborative bank of the future’, Melah noted that, “PalmPay is a technology driven company that believes in collaborating and innovating to deliver value to customers.
“What has given us success in the past 5 years of operation is our investment in data which gives us insights into customer behaviour. This enables us to create tailor-made solutions suitable for our customers. Our insight driven strategy has helped us reach out to the unbanked thereby building trust in open banking.
“We have succeeded by collaborating with other players in the financial sector. We believe that there’s still a lot more to do in building trust, driving financial inclusion in the last mile.”
The financial sector has undergone incredible changes. According to the EFInA Access to Finance (A2F) Survey 2023 report, the formal financial inclusion in Nigeria has grown significantly from 56% in 2020 to 64% in 2023.
Melah said, “this success can be attributed to collaborative efforts between banks and fintechs but more collaboration can take place. Interestingly , the challenges we face today have opened opportunities to collaborate to gain new markets, deliver new products to benefit the economy.”
…Exempts husked brown rice, grain sorghum, millet, maize, wheat, beans
The federal government set to begin implementation of the zero import duty on food items into the country.
The government through the ministry of finance has approved new guidelines for implementation of its policy on total removal of import duties and Value Added Tax (VAT) on selected basic food items.
The policy is effective from 15th July 2024 and will remain in force until 31st December 2024, the government said.
The Nigeria Customs Service (NSC), released import guidelines for the implementation of a Zero Percent Duty Rate VAT, exemption on selected basic food items.
The import waiver was to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens.
“Drawing from the Presidential directives aimed at alleviating the hardship faced by Nigerians due to high prices of essential food items, the NCS is pleased to announce that His Excellency, the President of the Federal Republic of Nigeria Bola Ahmed Tinubu through the minister of Finance and the Coordinating Minister of the Economy, Olawale Edun, approved the regulation for the implementation of a Zero Percent Duty Rate (0%) and Value Added Tax (VAT) exemption on selected basic food items. This policy is effective from 15th July 2024 and will remain in force until 31st December 2024.
“This measure aims to mitigate the high cost of food items in the Nigerian market by making essential commodities more affordable for citizens. The initiative is part of the government’s broader efforts to address food security challenges and ensure that basic foodstuffs are accessible to all Nigerians.
“However, it is important to emphasise that while this temporary measure is intended to address current hardships, it does not undermine the long-term strategies put in place to safeguard local Farmers and protect Manufacturers,” Edun stated.
The NCS, however, reiterated that for importers to participate, they must have filed annual returns and financial statements, paid taxes and statutory payroll obligations for the past five years.
He disclosed further that for companies importing husked brown rice, grain sorghum, or millet they must own a milling plant with a capacity of at least 100 tons per day, operated for at least four years, and have enough farmland for cultivation.
“It is pertinent to note that the implementation of this policy will focus on addressing the national supply gap. To participate in the zero-duty importation of basic food items, a company must be incorporated in Nigeria and have been operational for at least five years.
“It must have filed annual returns and financial statements and paid taxes and statutory payroll obligations for the past five years. Companies importing husked brown rice, grain sorghum, or millet need to own a milling plant with a capacity of at least 100 tons per day, operated for at least four years, and have enough farmland for cultivation. Those importing maize, wheat, or beans must be agricultural companies with sufficient farmland or feed mills/agro-processing companies with an out-grower network for cultivation.
The basic food items eligible for the zero percent duty rate include: husked brown, rice, grain sorghum, millet, maize, wheat and beans.
“The Federal Ministry of Finance will periodically provide the NCS with a list of importers and their approved quotas to facilitate the importation of these basic food items within the framework of this policy. The policy requires that at least 75 per cent of imported items be sold through recognised commodities exchanges, with all transactions and storage recorded.”
The Customs spokesman urged all stakeholders to cooperate fully in implementing the initiative for the benefit of all Nigerians.
“Companies must keep comprehensive records of all related activities, which the government can request for compliance verification. If a company fails to meet its obligations under the import authorisation, it will lose all waivers and must pay the applicable VAT, levies, and import duties. This penalty also applies if the company exports the imported items in their original or processed form outside Nigeria.
“The Nigeria Customs Service, under the leadership of Comptroller General of Customs, Bashir Adewale Adeniyi, remains committed to supporting government policies to enhance food security and promote economic stability. The Service urges all stakeholders to cooperate fully in implementing this initiative for the benefit of all Nigerians.”
A major intervention initiative which was initiated during the immediate past administration is now crippling investment entered into by a number of investors in the Modular refinery space.
The absence of the Investment Fund in addition to absence of crude supply arrangement has further frustrated the Modular refinery operators.
LEADERSHIP reports that a critical meeting is being proposed between the Minister of State for Petroleum Resources (Oil) Heineken Lokpobiri, and the Modular Refinery operators with the aim of resolving crude supply to them in local currency.
The venue of the proposed meeting was not revealed by our source but the meeting will conclude discussion on naira sale of crude to operators.
But investigations by LEADERSHIP shows that the Central Bank of Nigeria (CBN) may have jettisoned a proposed establishment of Refinery Development Fund that was initiated to facilitate construction of such facilities across the country.
Our Correspondent reports that the Crude Oil Refinery-owners Association of Nigeria (CORAN), has 15 members whose refineries are in various states of development.
Our findings shows that of the 15 only 5 are close to peak production while the other 10 are still under construction and lacking capacity to access funding.
It is also understood that if the 15 refineries begin production total output would be close to 120,000 barrels a day generating over 2 million jobs.
It is not clear about the fate of the Fund which the government and operators agreed to be domiciled with the CBN.
The 10 refineries are not only looking to borrow funds after spending close to $20 million to reach their present development stage but are also struggling to negotiate crude supply agreement.
Three out of the 5 refineries, namely Waltersmith, OPAC and Edo refineries are the only facilities that have overcome major challenges while the remaining 2 are affected by non crude supply locally.
It would be recalled that the Federal Government and Crude Oil Producers in the country have committed to a sustainable supply of crude oil to Nigerian refineries under a market determined pricing system.
The producers under the aegis of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce Industry (LCCI) at the instance of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) agreed to concede to a framework that would be mutually beneficial with a focus on ensuring that the local refineries are not strangulated with off-the-curve prices.
The parties made the commitment at a virtual meeting convened by the Commission Chief Executive, Engr. Gbenga Komolafe, with the OPTS on status review of the Framework for Seamless Operationalisation of Domestic Crude Oil Supply Obligation Template last month.
The meeting was part of efforts to effectively implement key sections of the Petroleum Industry Act, especially the aspect of pricing and crude supply to the domestic refineries.
Engr. Komolafe said President Bola Ahmed Tinubu, is fully committed to providing a level playing ground for producers and refiners to do business in the industry.
He said there is need to have a rule of engagement to ensure that the pricing model from the oil producers is not seen to be strangulating the domestic refineries. He directed producers and refiners to henceforth provide the regulator with cargo price quote on crude supply and delivery to effectively monitor and regulate transactions among parties. “We need to have the price quotes on a monthly basis” he directed.
The Domestic Crude Oil Supply Obligation (DCOSO) has a convergence with the nation’s energy security.
The NURPC boss said his administration is re-engineering its regulatory processes. “We allow all our processes to be transparent. While the Federal Government targets implementation of the regulation, all parties must concede to the rules of engagement as a guide for operation” he said
The regulator said it is committed to driving the issue of willing buyer/willing seller. “We need to discuss pricing especially as parties have committed to respecting their domestic crude oil obligation. For us as the regulator, we don’t want the upstream sector to be operated sub-optimally through cost under-recovery. So, the regulator is very alive to that. In crude pricing, we will never allow price strangulation to dis-incentivize our domestic refining capacity optimization.
The regulator does not support cost under-recovery in the upstream sector, and we will continue to work to ensure that crude supply profiteering as a negative factor that can strangulate our domestic refining capacity optimization is disallowed.”
The CCE further stated that “NUPRC is truly committed to attracting needed investments to boost upstream development and optimization of our hydrocarbon resources just as we want sustainability of domestic energy supply in the midstream and downstream sector.”
The spokesman of the CORAN, Eche Idoko, confirmed to our Correspondent that investors are at the moment struggling to get crude supply to sustain operations.
Idoko, said the proposed Refinery Development Fund has been a major set back to the sector and urged the present administration to revisit the initiative and called on the CBN to ensure its facilitation.
Meanwhile the CORAN is set to evaluate the investment landscape and operational viability of refinery businesses as Nigeria transitions towards a deregulated downstream oil market.
The Association is set to hold the inaugural edition of the Nigerian Crude Oil Refining Summit scheduled for October 7th and 8th, at the Eko Hotel & Suites, Lagos.
This critical event, themed “Making Nigeria a Net Exporter of Petroleum Products,” comes at a crucial time for the Nigerian oil industry as the nation navigates the opportunities and challenges presented by the downstream oil deregulation.
The summit aims to provide a comprehensive platform for discussing the significant transformations within Nigeria’s oil sector.
As the country transitions towards a deregulated downstream oil market, there is a pressing need to evaluate the investment landscape and operational viability of refinery businesses.
This deregulation is expected to cultivate a competitive market environment, attract foreign investments, and boost the operational efficiency of local refineries.
“This summit is a vital step in our journey to not only meet domestic demand but also position Nigeria as a leading exporter of petroleum products. We are excited to bring together industry experts, policymakers, and investors to collaboratively explore and address the challenges and opportunities that lie ahead,” said Mr. Momoh Jimah Oyarekhua, CORAN.
The summit will highlight the importance of creating a stable and transparent regulatory framework that encourages investment while protecting consumer interests and at the same time promoting collaboration between regulatory authorities, crude oil producers, and refinery operators to ensure a steady supply of feedstock at competitive prices, thereby supporting sustainable refining operations
According to CORAN, in light of the global shift towards cleaner energy and sustainable practices, the summit will also address the need for Nigeria to adopt advanced technologies, enhance local content, and align with global best practices. These strategies are essential for the country’s refineries to thrive in an evolving energy landscape and to achieve the goal of becoming a net exporter of petroleum products.
“Our mission at CORAN is to empower Nigeria’s refinery sector to reach its full potential. By fostering collaboration and innovation, we aim to transform challenges into opportunities, driving economic growth and energy independence for our nation,” Oyarekhua said.
The Nigerian Crude Oil Refining Summit 2024 will feature keynote speeches, panel discussions, and networking opportunities with key stakeholders, including government officials, industry leaders, and international investors. Attendees will have the chance to engage in in-depth discussions about the future of Nigeria’s refinery business and explore collaborative approaches to overcoming industry challenges.
The Crude Oil Refinery-owners Association of Nigeria (CORAN) is dedicated to advancing the interests of Nigeria’s refinery owners and operators. CORAN advocates for policies that promote investment and growth in the oil refining sector, ensuring the industry’s sustainability and its contribution to Nigeria’s economic development.
Urges military to sustain onslaught against oil theft
The Nigerian National Petroleum Company (NNPC) Limited has announced significant improvements in Nigeria’s crude oil production, attributing this progress to ongoing military efforts against oil theft and pipeline vandalism.
Group chief executive officer of NNPC, Mele Kyari made this known when he received in audience the Chief of Defence Staff, Gen. Christopher Musa who led senior military officers on a courtesy visit to the NNPC Towers in Abuja, on Tuesday.
Kyari, also called on the military to sustain the war against crude oil theft and pipeline vandalism saying the current onslaught against the menace has yielded improved growth in the nation’s crude oil production.
Recall that data from the Organisation of Petroleum Exporting Countries (OPEC) showed that Nigeria’s crude output rose by 930,000 barrels in July which boosted the country’s daily average oil production to 1.386 million bpd during the month.
“I personally call for enhanced and sustained security engagement. This is because we have reached a new peak in production that we haven’t seen in the last three years. This is clearly related to the sustained efforts by the armed forces and other security agencies to protect our critical assets, particularly the pipeline infrastructure in specified areas where we are working closely with these agencies. We are already seeing the results transforming into increased production,” Kyari said in a statement by the company’s spokesman, Olufemi Soneye.
The GCEO, who commended General Musa and his team for their unwavering commitment to securing the nation’s critical hydrocarbon assets especially in the Niger Delta region in recent months, emphasised that these achievements are not only crucial to Nigeria but also to the global energy community.
He expressed confidence that the CDS and his team will deliver on the Presidential mandate to mitigate security-related challenges affecting the nation’s crude oil production.
“Components of this effort that depend on security are being effectively managed by you. Your coordinated and focused response is paving the way for improved security engagement, particularly in the Niger Delta,” he said.
Earlier in his remarks, Gen Musa said the visit was intended to introduce the Monitoring Team to the NNPC Ltd, which will be responsible for interfacing with the Company and other stakeholders in the oil-producing regions to secure the nation’s critical hydrocarbon infrastructure.
While pledging commitment towards improving security and the performance of his troops, the CDS said the military will sustain the onslaught and analyse the troops’ capabilities to enhance their performance and bolster productivity.
He stressed the need to ramp up production for a prosperous economy and reassured collaboration with intelligence agencies, private security, state governments and host communities for enhanced performance.
“Working in silos won’t give us the best results. I want to assure you that we will collaborate with the necessary stakeholders to achieve our set targets as mandated by Mr. President.”
The Nigeria Customs Services (NCS) has said the recent policy statement on removal of import duties on staple foods by President Bola Tinubu will cost the government up to N188.37 billion in revenue for the six months of implementation of the presidential directive.
President Tinubu had in July this year announced suspension of import duties on essential food items as part of the strategies to cut high food processes and stem the nationwide hunger in Nigeria.
The CG said the government has decided to forfeit the expected revenue from the implementation of the items to guarantee food security and price control for Nigerians. He said the government initiatives and efforts of the customs service at the Nigeria Customs Service underscore that food security is not just an agricultural issue, but a national priority that requires coordinated efforts across all sectors. “The NCS is committed to playing its crucial role in this endeavour.”
Controller General of Customs Adewale Adeniyi who made the claim also said his service is now waiting for implementation guidelines to be issued by the Federal Ministry of Finance which he said is being fine tuned before release.
CGC Adeniyi made the remarks today at the 2nd Economic Confidential lecture & Book Presentation in honour of the CGC titled “Impactful Public Relations in Customs Management”.
The customs boss said the government generated N3.819 trillion as revenue from the affected items between 2020 and 2023. During this period, the commodities generated N191,715,743,625.55 in customs duty and N561,775,629,251.70 in levies paid to the government.
“These figures highlight the significant revenue implications of the new policy. Projecting based on recent trends; we estimate that the six-month tariff suspension could result in a revenue forfeiture of approximately N188.37 billion. This is no small sum, and it represents the government’s commitment to prioritising food security over short-term revenue goals,” Adeniyi said yesterday.
He said the implications for the NCS extend beyond mere numbers, adding that the removal of tariffs is likely to lead to a surge in food imports. “We must prepare for this increased volume, ensuring that our ports and border stations can handle the influx without creating bottlenecks.”
Adeniyi said the period provides a unique opportunity to gather data on how tariff removals impact import volumes and food prices, adding that the customs will be meticulously tracking these metrics to inform future policy decisions.
He said the goal is to effectively support the government’s food security initiatives while maintaining the integrity of the nation’s borders and trade processes. “We are implementing a multi-faceted approach that encompasses policy alignment, operational efficiency, technology adoption, and stakeholder engagement,” he said, “We are committed to implementation of the President’s directive.”
He promised to deploy specially trained officers of the NCS to carry out the implementation of the policy for effective delivery in line with the agenda of the President.
NCS said it is also implementing advanced analytics tools to monitor import trends, pricing impacts, and potential abuse of the new policies in real-time. The CG said the move allows the service to provide valuable feedback to the government and make necessary adjustments quickly, ensuring the effectiveness of food trade policies.
…Assures shareholders of improved dividend payment
Zenith Bank Plc, has said part of its ongoing N290 billion hybrid offers will be used for the growth and expansion of its global operation.
The Bank is raising N290 billion through a combination of a rights issue and a public offer. The rights issue offers 5.233 billion ordinary shares of 50 kobo each at N36.00 per share, while the offer for subscription presents 2.767 billion ordinary shares of 50 Kobo each at N36.50 per share. The offer, which opened on August 1, 2024, is expected to close on September 9, 2024.
This is as the Bank reassured shareholders of improved dividends payout going forward.
Speaking at the ‘Facts Behind the Offer Presentation’ held yesterday on the floor of Nigerian Exchange, the Group managing director/CEO of Zenith Bank, Dr. Adaora Umeoji said that the Bank is looking to solidify its presence in key global financial hubs while supporting its clients’ international operations and investments.
On the use of the proceeds, she said Zenith Bank is undertaking the offer to increase its capital base in line with the new minimum capital requirement and also to enable it to pursue its strategic objectives including financing its strategic business developments and expansion into other geographic markets in order to make quality banking more accessible.
She added that it will also enable the Bank to conclude the overhaul of its information technology infrastructure and provide additional working capital to support its expanding operations and enable the Bank to take maximum advantage of emerging opportunities.
According to her, Zenith Bank has a track record of efficient capital utilisation: 35 per cent of the proceeds realised from this combined Offering would be used to fund our expansion strategy increasing our footprint in Africa and other parts of the world; 20 per cent will be used to enhance our IT infrastructure and digital capabilities; while the balance of 45 per cent will be deployed as working capital to support the real sector of the economy with a focus on the retail and SME segments.
She noted that “Zenith Bank is looking to solidify its presence in key global financial hubs while supporting its clients’ international operations and investments.”
Zenith Bank GMD added that a significant milestone in its expansion plan is the upcoming establishment of a branch in Paris, France, saying that this new branch would be a critical bridge for enhancing business prospects within the West African Economic and Monetary Union (UEOMA) and Economic and Monetary Community of Central Africa (CEMAC) regions.
She explained that the Bank will leverage on the Paris branch to consolidate most of its businesses in the Francophone African countries, starting from Cameroon and Côte d’Ivoire.
Umeoji highlighted that “with over three decades of operation, Zenith Bank has developed a strong brand loyalty position as preferred banking partner for many Nigerians.
“The Bank as at December 31, 2023 achieved Tier-1 capital of N1.9 trillion, the highest in the Nigerian banking industry; shareholders’ funds stood at N2.3 trillion and a market capitalization of N1.3 trillion.
“The Bank achieved profit before tax of N796 billion, making us the most profitable bank in Nigeria and has paid a dividend of N4.00 per share, making the Bank the highest dividend paying bank in Nigeria,”
She pointed out that this trend has been sustained in the past five years, saying that “it would also interest investors to note that our dividend payout was 25 per cent of our organic profit without FX revaluation gains; this implies that we have the capacity to even pay more dividend organically without FX revaluation gains.”
Chairman of Nigerian Exchange, Ahonsi Unuigbe stated that “with a capital base of N1.8 trillion as of December 2023, Zenith Bank has consistently demonstrated its relevance in the financial services landscape in our country.
“The Bank has positioned its business for sustainable long-term growth. With over 30 years in existence, founded in January 1990 and listed on our exchange in 2004. The bank has continuously expanded its operations, both within and beyond.”
The Nigerian Marítime Administration and Safety Agency (NIMASA), on Monday, vowed to enlist the support of the United Nations (UN), over foreign insurance companies’ continued collection of war risk surcharge on Nigerian bound cargoes despite sharp reduction in piracy and sea robbery on the nation’s water.
LEADERSHIP reports that Nigeria pays a minimum of $400 million annually to the insurance firms when there has not been any attack on vessels in the last two years.
However, speaking during an interactive session with the media on Monday, the director general of NIMASA, Dr. Dayo Mobereola, said NIMASA has initiated discussions with key international partners, including taking the matter to the United Nations.
He stressed that with the backing of the UN and other international stakeholders, Nigeria would be in a stronger position to challenge the insurers, forcing them to adjust the premiums in line with the actual risk.
“We’ve engaged them, and we’re taking it to the United Nations. The UN is going to support us, and we will be able to take it to the insurers who will have no choice but to reduce it as well,” Dr. Mobereola asserted.
The NIMASA DG also highlighted the need for Nigeria to collaborate with international maritime organisations to tackle the entrenched practices that sustain the war risk premium.
The NIMASA boss stated that despite the significant improvements in maritime security, the surcharge continues, saying it has inflated the cost of trade for Nigeria, underlining the need for a coordinated international effort to address the issue.
“In all honesty, Nigeria alone cannot do it. We need the international maritime organisations to be with us,” he stated.
He stated further that the war risk surcharge is not determined by the actual risk level but by a cartel profiting from the status quo.
“Despite Nigeria’s concerted efforts to curb piracy and enhance maritime security, the war risk premium has not seen a corresponding decrease. Even if we have zero piracy and no security incidents for the next ten years, if we don’t force the issue, they will continue to charge us,” Dr. Mobereola stated.
He argued that these premiums, which significantly elevate freight costs for imports and exports, are being artificially sustained by insurers who are well aware of the improved security situation but prefer to maintain the high charges to maximise profits.
However, the NIMASA boss said the agency under his administration will work to raise the maritime industry’s contribution to the country’s Gross Domestic Product (GDP).
The NIMASA boss said improving maritime contribution to the GDP requires that every aspect of local maritime industry is productive, beginning with a very robust cabotage trading through vessel acquisition by local shipowners and availability of cargo for them to lift.
According to the DG, the country needs to improve on what the maritime industry is contributing to the GDP and the agency intends to achieve this by a set of enforcements including deployment of the modular floating dock, seeking the appropriate and relevant training for cadets and boosting cabotage trade.
He said: “We are reviewing the process of how the vessel’s crew are being engaged. We are also working to ensure that the cadets we produce under the National Seafarers Development Programme (NSDP) are good products after training. All these issues are on our table. There’s not a single day we don’t deliberate on them.
“We are also working on deploying the modular floating dock. We have many proposals on the table but we want to make sure that a good decision is reached on it. We want to put it to use as soon as possible. It will create employment for our trained cadets, earn revenue and improve the sector, but we want to do it right.”
