Nigeria has begun moves to establish a Protection and Indemnity (P&I) Club for ship owners, operators, charterers and seafarers operating in the nation’s maritime space in order to checkmate the huge capital flight that accrues to foreign P&I Clubs from the Nigerian maritime sector.
This was disclosed by the chairman/CEO of Starzs Investments Company Limited, Greg Ogbeifun, while speaking to selected maritime journalists in Lagos recently.
Ogbeifun said: “The directive to set up a Nigerian P&I Club came from the Presidency, and discussions are already ongoing between the Nigerian Maritime Administration and Safety Agency (NIMASA) and operators.
“The P&I Club is something that needs to be done because of the amount of capital flight that emanates from our maritime sector to foreign nations. In our inaugural meeting with NIMASA over the P&I Club initiative, I presented all the P&I premiums that Starzs Investments Company Limited has paid on all its ships in the last three years, and this came to almost $500,000. This premium was paid by my company to foreign P&I Clubs in the last three years despite not making any claims within the stated period.
“Obviously, we are not in business to start making claims. We are not having accidents or deaths in our operations, and that was why we did not make any claim to the foreign P&I Clubs under the three years that we paid about half a million dollars as premium to them.
“Now, Starzs is just one shipping company in Nigeria that has paid so much to a foreign P&I Club as premium. Imagine how much the foreign P&I Clubs make from all the shipping companies in Nigeria? The logic is to checkmate the colossal amount of money Nigerian shipping firms pay as premium to foreign P&I Clubs.
“These foreign P&I Clubs are using the premiums paid by African shipping firms to develop their own countries. That is why the Presidency wants indigenous ship owners to come together and form a Nigerian P&I Club so that all these monies paid as premiums will stay in our own economy.
“If government can get the indigenous ship owners to come together using a consultant who will be involved and a foreign technical partner who understands the business, then Nigeria can start by having all the P&I payment made here, while re-insuring with a foreign P&I Club. In that way, 20 percent of ship owners’ premium is kept here in Nigeria while 80 per cent is used to secure their businesses abroad.
Gradually, as Nigeria’s P&I Club grows stronger, we will start increasing the percentage here while reducing the percentage used abroad to secure our businesses. This is achievable, that is if we want it to happen. If we can achieve this, other ship-owners from neighbouring African countries will join our P&I Club and this will be beneficial to the Nigerian economy.”
A P&I Club is a non-governmental, non-profit mutual or cooperative association of marine insurance providers to its members which consists of ship owners, operators, charterers and seafarers under the member companies.