Connect with us
Switch
Advertisement
Samsung
Advertisement
Polaris bank
Advertisement
Esetech
Advertisement
Payfarmer
Advertisement
Patricia
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
Stallion ads
Advertisement
app

Columnists

Vehicle License Plate: Status symbol and national security implications

For something as important to national security as vehicle identification is, Nigeria has been very lax in enforcing the provisions of the law.

Published

on

On January 20th, 2009 I joined billions of people around the world as we watched the inauguration of Barrack Obama as the first African-American President of the United States of America. As he along with members of his family exited the Presidential Limousine nicknamed ‘the Beast’ to walk along Pennsylvania Avenue, I noticed the licence plate on the front of the Car read ‘USA 1’ and to me that depicted clearly that it conveyed the nation’s number one citizen.

So imagine my confusion a few weeks later when I saw pictures of the new President’s convoy – Americans say Motorcade – driving on the streets of the State of Georgia and it had a different license plate “800-002”. It looked curious so I looked it up and discovered American Presidents since the year 2000 have used the District of Columbia (DC) number plates. The White House is in D.C and the license plate is both a way of showing solidarity with the people of D.C and keeping with the rule of law.

READ: FG says vehicle owners to pay N250,000 to convert from petrol to autogas

This piqued my curiosity and I decided to look up how other Heads of State and Government act in relation to the display of vehicle license plates.

In the United Kingdom, the Queen is exempted from having registration plates on her car, as she is also exempted from having a driver’s license for the simple reason that license plates and driver’s licenses are issued by Her Majesty’s Government under Her Majesty’s (The Queen’s authority). Countries with Sovereigns generally operate under this sort of arrangement with variations as applicable.

Specta

READ: FG commissions Made-in-Nigeria vehicles worth N364 billion

In Nigeria, the President and Vice President’s vehicles display the Coat of Arms of the Federal Republic of Nigeria at all times.

Vehicle license plates are typically displayed in the front and rear of a vehicle. They serve as a form of identification and also have a security function. Encoded in the license plate displayed are all the relevant information regarding the ownership/make/model, chassis and engine number of the vehicle (i.e. the particulars).

READ: Cotonou smiles as Nigeria’s auto policy leads to 63 percent drop in vehicle imports

During my year-end vacation in Ibadan, Oyo State, I noticed a lot of vehicles being driven around without license plates or with dealer numbers displayed – these are numbers allotted to particular car dealers for temporary use.

This is quite dangerous as such cars, if stolen cannot be traced as their details are not available in the Central Motor Registry (CMR) database. This act is also a violation of existing laws in the country.

READ: Nigerian automaker raises $9 million despite protest against electric car in Nigeria

Section 10(4)(h) of the FRSC (Establishment) Act, 2007 states that it’s an offence to be on the road without a valid vehicle license or identification mark being displayed. Similarly, Section 10(4)(s) of the Act makes failure to display a number plate on vehicles an offence.

Coronation ads

The National Road Traffic Regulations (NRTR) 2012 also provides as follows: Section 36 (NRTR) 2012 makes it mandatory for all private and commercial vehicles to have number plates which shall be fixed on them in a manner as not to be easily detachable.

Polaris bank

READ: Sanwo-Olu launches Nigeria’s first electric car, to complete Lagos-Badagry expressway

FRSC in a recent press release stated that “apart from identification purposes, vehicle registration number plates are security items that are captured in the National Security Architecture and have been used to assist Security Operatives in tracking some serious national security issues. Removing such identification items from Vehicles plying our roads will not only offend the law, but would further jeopardize national security.

Jaiz bank ads

So this brings us to the question of why Nigerians refuse to display their number plates – either by deliberately not attaching them to their vehicles or covering them up (when they are attached).

READ: Number of cars on Nigerian roads hit 11.8m in a year

It is basically a status thing for most Nigerians. If you drive around highbrow areas in any part of Nigeria, a large proportion of the vehicles you see on the roads either do not attach or cover up their licence plates. The more expensive the vehicle is, the less likely it will display a license plate. So Nigerians have come to associate covered up license plates as a sign of wealth, influence and power. So all the supposed ‘big men’ drive around in cars without any visible means of identification and are escorted about by law enforcement agents that should know better and uphold the law.

READ: FG to slash import duties on tractors, buses, others in 2020 Finance Bill

Convoys of powerful people in Nigeria consist of vehicles without any license plates or some with curious nondescript numbers such as –Pilot 1, Escort 1 and SPY Police numbers which cannot be traced to a particular vehicle as they are easily switched between vehicles.

Another phenomenon you observe in big cities in Nigeria are vehicles driving with only one license plate displayed. This contravenes Section 37(1) of the (NRTR) 2012 which states that the identification number plates carried by a motor vehicle or articulated vehicle shall be displayed on two plates for a motor vehicle and three plates for an articulated vehicle. The number plates shall in respect of a motor vehicle be fixed one on the front of the vehicle and the other at the centre or on the offside of the rear of the vehicle or as may be provided by the manufacturer.

READ: Hyundai to invest $87 billion into producing 44 new electric vehicles 

app

Growing up, the display of vehicle license plates on the front and rear of a vehicle was a normal sight, so you ask where Nigerians acquired this new method. It comes basically from interactions with the United States of America. Unlike Nigeria that has a unified National Road Traffic Regulation, in the U.S, the States determine this so it varies from State to State. Generally, if a State issues two license plates, you are required to mount both of them. If a State issues one license plate, it usually goes on the rear of the vehicle. For those States that require only the rear plate, the stated reasoning is usually cost savings. The State only has to produce one license plate for each car and truck, but they can continue to charge the same price for registration.

READ: Minister denies approving NIPOST license fee increment 

The continuous use of SPY Police numbers and other specialised number plates (other than customised number plates which an individual pays for) such as’ Presidency, NASS, NANS, NLC, etc have created a culture of VVIP (these ones transcend regular VIP) that is inimical to security and national cohesion. It creates a class of citizens that law enforcement automatically defers to on sight. You have a very good chance of driving through checkpoints carrying illegal goods without being stopped once your vehicle has any of the VVIP numbers listed earlier.

READ: FG approves 60% debt forgiveness for licensed radio and television stations  

The use of specialised numbers, emblems, or red beacons on vehicles is a carryover from the colonial era when the colonialists did everything they could to set themselves apart from the general populace.

In India, the government has set machinery in place to have the vehicles of top constitutional authorities such as the President, Vice President, Prime Minister and Governors to display their registration numbers. This move comes as part of efforts to eradicate the VVIP culture in the country.

READ: Automakers need to create greater value for Nigerians – GAC

Laws are only enforceable in the long run when all citizens can be held accountable irrespective of social status. For something as important to national security as vehicle identification is, Nigeria has been very lax in enforcing the provisions of the law without fear or favour.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Columnists

Repositioning the Nigerian Power Sector

The Nigerian power sector continues to grapple with the age-long problems that have plagued the sector even before the privatisation exercise.

Published

on

Abuja, Ikeja Discos top list in collection efficiency in Q1 2020- NERC, Estates in Lekki increase electricity tariff to N105/kWh, Eko Electric, Ikeja and 5 others to face NERC sanction for non-compliance, CBN reveals framework for financing National Mass Metering Programme (NMMP), Nigeria ranks eight African country with well-developed electricity regulatory frameworks, as Uganda tops.

A Punch newspaper report says Nigeria lost an estimated N20.5bn in 22 days (January 1 and 22, 2021) due to continued rejection of electric power by the electricity distribution companies (Discos) who in turn argue that it makes no business sense to wheel power to locations where consumers show an unwillingness to pay for the electricity they receive.

Some stakeholders have defended the discos’ actions by arguing that some of the power generated are allocated to areas with little or no revenue prospects, particularly areas where power theft is more common.

This leaves the discos with no option but to reject some of the load to avoid running into further liquidity issues. The news report further stated that a total of 1,941 megawatt-hour of electricity was restricted during the review period due to insufficient gas supply, as well as lack of distribution and transmission infrastructure.

The Nigerian power sector continues to grapple with the age-long problems that have plagued the sector even before the privatisation exercise in 2013. Insufficient gas supply, weak transmission infrastrusture, absence of cost-reflective tariffs and poor metering system have remained largely unresolved. On the demand side, the final consumers have continued illegal actions of meter bypass and in many cases have accumulated unpaid bills.

Granted, among the uncaptured consumers, there are those without access to the national power grid, particularly in rural areas, however, the wide disparity between registered consumers and estimated number of households today suggests that power theft in Nigeria is not on a small scale, and this could be contributing meaningfully to the liquidity issues gripping the power sector value chain.

Specta

Tackling the liquidity constraints of the power sector remains at the forefront. Among suggestions to achieve this is structuring the activities in power sector as financial products for capital market transactions in a bid to facilitate the required liquidity, deepen private participation in the sector and enhance transparency in the entire value chain of electricity generation.

Continue Reading

Columnists

Local content – A driving force for African oil and gas sector sustainability

There is a wave of change coming and COVID-19 is the first of the determinants that oil and gas investment will gradually be reducing.

Published

on

How Libya and Iran can add to Nigeria’s woes

With 2020 being a year of uncertainties in the oil and gas sector and some of the decisions, activities and market trends that took place last year, I reflect on what some of the activities pre-COVID-19 and now means for the African energy sector.

Following the reform of the African Petroleum Producers’ Organisation (APPO) Fund, I was opportune to witness the equally newly reformed Africa Energy Investment Corporation (AEICORP). The AEICORP is to provide “a Solid Capital Base and Liquidity Profile, a Preferred Creditor Status, Developmental Impact, Strong Financial Performance Returns to Investor,” for investors to participate in a low-risk pan-African growth.

With one of the objectives of APPO seeking to ensure member countries cooperate, I believe for African countries to reap the maximum benefits from oil and gas, investment in energy technology through institutions like AfDB and AEICORP will help to achieve this aim. The thought of African investments in the hydrocarbons sector takes my mind to a familiar place – de-carbonization of fossil fuels, as opposed to abandonment.
De-carbonising fossil fuels through technology developed by Africans might take a while to embrace but it is worth the long-term investment. At the moment (or for the next 20 years), Africa is not ready for zero-carbon emission energy sources. Almost all of the oil-producing countries on the African continent depend on revenues from oil and gas to fund their budgets and keep their economy moving. It cannot be denied that the energy security of Africa is highly dependent on decarbonisation.

This is because most of the African countries export their crude to countries abroad and the countries abroad are moving towards adopting the terms of the Paris climate accord which aims to see low carbon emission.
New discoveries of oil and gas are still being made daily with a large part of prospective areas still underexplored. All the countries on the continent cannot boast of 24 hours steady supply of electricity. The West is embracing decarbonisation because they have gotten to a stage where all of the basic social amenities are working, Africa isn’t there yet.

Africa looks to be one of those who will suffer climate change the most. We cannot follow the same paradigm as the advanced countries and we will take a longer time to achieve what they will achieve. The COVID-19 pandemic is a trigger for many African countries to begin to gradually embrace diversification and invest in other sectors of their economy. If African countries do not fully depend on the revenues from oil and gas, we can begin to talk carbon decarbonisation. For now, it is a gradual process and we still have a long way to go.

Specta

The West will not come and save us. The West will save the West and Africa should save Africa. In November 2019, the European Investment Bank (EIB) announced that it will no longer grant loans for crude oil, natural gas and coals project from January 1st 2022, with a few exceptions for gas projects. Also, in October 2020, the United Nations asked world’s publicly funded development banks to bring their lending policies in line with the Paris Agreement, and a few weeks later, many of the institutions including the African Development Bank Group (AfDB) said they will reduce investment in fossil fuels related project.

This is to show that it would soon be every investor for themselves. And if China follows suit, the African market will break.

When all of these lenders stop funding fossil fuel projects in the country, most African countries will have little or no advantage when it comes to negotiations. Chinese authorities have been big players in the development of oil and gas resources in Africa and one of the biggest lenders to African countries. If by 2025 that all of the world’s publicly funded development banks would have joined the EIB in halting the disbursement of funds for fossil fuel projects, an indication that they are only willing to do embark on projects that are in line with their net- zero commitments, China will be the only option left.

Many African countries have already signed agreements that will see them forfeit important state-owned assets if they fail to meet up on their repayment plan for loans obtained from China. Let us not forget that China is also a signatory to the Paris climate accord. So if in the future, China decided to also stop funding fossil fuel projects, most of our countries in Africa who do not start planning for the unexpected now will be left with a wrecked economy and with no option than to forfeit out of the little they have to pay their debts.

French Group, Total, ‘totally’ dominates the oil and gas sector in some African countries. What happens to us when Total pulls out its resources and stops funding fossil fuel projects, because being a French company, it is one of the companies expected to fully commit to the terms of the Paris Agreement?

Is the Africa Continental Free Trade Agreement (AfCFTA) the saviour?

Yes, we do have a genuine opportunity through the AfCFTA. The AfCFTA was formed in 2018 to eliminate tariffs on intra-African trade, to make it easier for African businesses to trade within the continent and cater to and benefit from the African market. It creates a single market for goods, services, facilitated by movement of persons to deepen the economic integration of the African continent, under the Pan African Vision of an integrated, prosperous and peaceful Africa. The benefits are:

To improve the intra-African trade landscape and export structure;

Coronation ads
  • To create a sound global economic impact;
  • To develop better policy frameworks;
  • To foster specialisation and boosting industrialisation;
  • To strengthen regional and inter-state cooperation;
  • To increase employment and investment opportunities, as well as technological development;
  • To provide the opportunity to harness Africa’s population dividend.

In a few years, the AEICORP and AfCFTA may, alongside a few lending bodies and China, be the only creditors willing to invest in the African energy scene. The continent needs to embrace its own Funds and platform and invest in technology in the African energy scene, in preparation for the future of the oil and gas industry.

Polaris bank

One of the solutions to energy security is for African countries to make a case for themselves. Why is the West ignoring the gas sector, which is cheaper and safer and the least-polluting fossil fuel to a more expensive and less reliable source like renewable energy? If African forces start to condemn the decision of these lenders to stop financing fossil fuel projects, under a uniform voice and umbrella body like APPO, negotiations will take place and better resolutions that will favour all parties can be reached.

Countries with huge natural gas reserves such as Nigeria, South Africa, Tanzania, Algeria, Ghana, Equatorial Guinea, Ghana, Senegal, Cameroon etc. should follow in the footsteps of Mozambique and attract investors to invest in that sector. Equatorial Guinea also has projects lined up for its ‘Year of Investment’. Egypt has also been investing heavily in the gas sector and alongside Mozambique, it would become one of the biggest players on the continent, in a few years.

Jaiz bank ads

African countries can also take advantage of the fact that an African, H.E Mohammed Barkindo is the Secretary-General of the Organisation of Petroleum Exporting Countries (OPEC) to lead negotiations in ensuring that fossil fuel projects are still catered for by lenders.

Countries on the continent should also trade between themselves in the areas of energy. It is remarkable what the East African countries are doing together to ensure electricity supply in each other’s countries. Last year, Nigeria also announced it will be importing Niger’s surplus oil. African countries need to get from Africa what is present in Africa. This is the way by which we can help the cause of the AfCFTA, APPO, and each other to reach our full energy potentials and have adequate energy security.

There is a wave of change coming in the world and COVID-19 is the first of the determinants that oil and gas investment will gradually be reducing. African countries cannot afford to buy this change yet. We cannot afford to compare ourselves to the West as we lack what they have, and yes, we have some of the fossil fuels that they still want before their full switch to renewables. We have to take advantage of that gap and reach an agreement that favours all.

It will be great to see the terms of the Paris Climate Accord come to pass in the future. But for now, Africa needs the financing and investment in technology will help to still keep to the terms of the Accord while investing in the huge oil and gas potential here.


About the author

David R. Edet is an oil and gas expert, serving in the capacity of Business Analyst at Afric Energy Ltd, an Oil and Gas Company operating from Nigeria. Mr. Edet is a leading voice to youth involvement in African energy matters and campaigns for more involvement of local contact in the African hydrocarbons sector.

Continue Reading

Columnists

What banks can do to improve Real Sector Lending in 2021

To navigate the nation’s economy from oil, banks will have to pay more attention to real sector lending in 2021.

Published

on

net interest income, Nigerian Banks, Fitch, Nigerian banks tremble over Cyber attack, Most Nigerian banks are very likely to fail stress tests should the economic downturn persists and deepens, What Banks can do to improve Real Sector Lending in 2021

The beginning of the financial year for Nigerian Banks has become a comparison of which bank closed with the largest balance sheet for the previous year; a simulation of which one of the tier-1 banks would outdo the others in the $1billion dollars profit pursuit, and which bank would pay the most dividends to its shareholders.

Every so often, financial analysts employ the use of important indices to decipher areas where these financial institutions need to shore up their numbers and employ their resources to align with the fiscal and monetary policies of the government. These Analysts are usually ignored. Consequently, is the poor policy implementation of the CBN and an ever-widening chasm between the fortunes of Nigerian banks and the economy in which they operate.

A major area where most analysts have faulted Nigerian banks in recent times is in lending – lending to the real sector of the economy.

READ: Nigerian LDR policy weakens banks’ balance sheets, IMF says

The expectation and the reality

On July 3rd 2019, in a letter to all banks, the CBN through its Director of Banking Supervision announced “REGULATORY MEASURES TO IMPROVE LENDING TO THE REAL SECTOR OF THE NIGERIAN ECONOMY”. A laudable directive that was to see banks maintain a Loan to Deposit Ratio (LDR) of 60%, wherein SMEs, retail, mortgage and consumer lending would be assigned a 150% weight in the computation of this LDR, and stiff sanctions of additional CRR of 50% of the lending shortfall will be levied against unyielding banks.

Specta

This regulation fuelled the expectation of substantial gains in the real sector given the relative availability of funds. Banks jostled and made a show of dishing out these loans, but as records of CRR debits for LDR failure began to hit the news, it became apparent that most banks were still stuck in their reality of doing business in Nigeria.

READ: How digital transformation will impact Nigeria’s projected $8.79 billion economic expansion

The reality being that Nigerian Banks have managed to stay amongst the most profitable banks in Sub-Saharan Africa while largely ignoring the real sector. A review of the earnings of 10 top Nigerian Banks between 2009 and 2019 showed that a sizable portion of their profit growth came from non-client driven activities, even as income from core banking activities of these banks shrank from accounting for 85% of their profits in 2009 to 65% of their increasing profit in 2019.

Perhaps this goes a long way to explain the 2020 H1 profits posted by these banks amid a pandemic and looming recession.

READ: CBN issues framework for QR payments

A case of once-beaten?

In fairness, Nigerian banks already got their fingers burnt in the real sector oven once before, and the existence of AMCON is a constant reminder of this fact. The Banks’ attempts to adhere to the new regulation most likely contributed to a rise in the industry’s NPL in H1 2020 notwithstanding CBN’s best intentions with the loan restructuring freedom banks were given to protect themselves from the crippling effect of the pandemic. There doesn’t seem to be a way out for Nigerian banks.

READ: CBN debits N499 billion from accounts of 12 banks for failing to meet lending targets

Navigating the waters of necessity

With all the modernization around the banking process, banking at its root has remained unchanged over the centuries. It still entails receiving from areas of surplus to fix deficits. The real sector of the Nigerian economy has been in severe deficit as the nation directed its attention, and finances, to the oil sector which has been the sustenance of a potentially diverse economy like ours for far too long.

Coronation ads

If Nigerian banks are to navigate the nation’s economy from oil before the rest of the world completes the move, then they will have to pay more attention to real sector lending in 2021. This can be done through the following:

Polaris bank
  • Understanding the necessity

Real Sector lending should no longer be viewed by banks through the lens of meeting regulatory requirements only, their importance to the Banks’ balance sheet should be understood. In the near future, it is unlikely that banks will be unable to earn as much from derivatives as uncertainty caused by the pandemic continues to cause spectacular swings in some markets coupled with a wider acceptance of crypto over fiat which may shrink some markets.

Also, further ignoring the real sector market by commercial banks inadvertently means that Fintechs and their MFBs continue to ramp up the profits in these markets, and may someday be big enough to compete favorably with the commercial banks. Mergers and acquisitions will hasten this process.

Jaiz bank ads

READ: Analysis: Access Bank’s valuation highlights merger blues

  • Having an action plan

As an action plan, real sector lending (not just the creation of risk assets) should be incorporated into the KPIs of relevant members of staff. Also, the banks should actively pursue sectors of the economy where they have comparative advantage by virtue of their expertise, customer base, technological advantage and/or branch network.

  • Using segmentation

Too much emphasis has been placed on “value chain” making banks feel the need to play in all aspects of a business. They practically provide funds for all aspects of the same business- from manufacturing to distributorship. Whilst an argument could be made on the need for synergy and the relative ease of monitoring value chain businesses, this type of concentration of funds puts banks at higher risk of loss when a part of the value chain defaults. However, focusing on a segment of a business could have its own benefits in limiting exposure.

READ: Understanding the deregulation of the downstream Oil and Gas sector in Nigeria

  • Revisiting VC, PPP and Loan syndication

Perhaps the next big business will not be a conventional textile mill nor will it be distributorship of FMCGs. Nigerian banks need to have a foothold in the businesses of the future by adopting VC models of investments and fundraising for these business ideas. Public-private partnership and Loan syndication should not also be limited to development of social amenities but to funding businesses in the real sector.

The real sector lending drive of the CBN has shown promise since inception, increasing the level of industry gross credit by N829b in its first few months between May and Sept 2019. The introduction of the GSI by the CBN from August 2020 is also a step in the right direction to protect banks from an increased default rate of personal loans.

Nonetheless, these policies will not upturn the Nigerian economy if Nigerian banks continue to treat real sector lending as an occupational hazard rather than the occupation itself.

app

Continue Reading
Advertisement




Advertisement