Home Business Expunge 2% of annual revenue contribution from courier, logistic regulation—-LCCI

Expunge 2% of annual revenue contribution from courier, logistic regulation—-LCCI

by Business News Report

Lagos Chamber of Commerce and Industry has asked the federal government to expunge the regulation in the courier service that demand the contribution of courier service provider to contribute 2 per cent total annual revenue to the Postal Fund which sum shall be used for postal development and delivery of postal services in rural and underserved areas.

The LCCI in a statement signed by its Director General Muda Yusuf said the Chamber “has strong reservations over a provision in the courier regulation guidelines which prescribes that “an operator of courier and logistics services shall contribute a sum equal to 2% of its total annual revenue to the Postal Fund which sum shall be used for postal development and delivery of postal services in rural and underserved areas.”  

“We submit that this provision will put too much burden on courier and logistics businesses and make them unsustainable.  These businesses are already grappling with multitude of taxes and levies in the course of their daily operations.  We request that this provision be expunged immediately in the interest of investments and investors in the courier and logistics sector of the Nigeria economy. The provision in the Courier regulation which vests the Minister with powers to compel any licensed courier and/or Logistics Services Operator to undertake free delivery service for the purpose of Universal Postal Service Obligations/or any Social Service Delivery in National Interest needs to be reviewed.  It borders on overbearing powers with little regard for the interest of investors. 

“This provision will undermine the confidence of investors in the courier and logistics business and should be immediately be repealed.  It is a negation of the efforts of the federal government to attract investment, create jobs and grow the economy.  The reality is that many corporate organisations are already undertaking various forms of Corporate Social Responsibility projects without being compelled or coerced to do so.  Some have set up foundations with ample resources to drive this process.  What is important is to deepen the partnership between the public and private sectors. Also of concern is the provision in the Courier regulation which stipulates that: “All courier items/articles such as Right Issues, Shares Certificates, Statement of Accounts, Cheques, Letters or Offer documents, etc weighing below 0.5kg brought to a Courier/Logistics service operator shall be recorded and referred to the nearest Post Office of the Nigerian Postal Service for processing and delivery.  Failure to do so will attract payment to Nigerian Postal Service of a penalty of 90% of the amount charged on the item by the erring Operator.” Again, this is an unfair provision.  The citizens should not be compelled to patronise NIPOST against their will, irrespective of the size or weight of the items. Indeed, it is an infringement on the rights of citizens and in conflict with the principle of fair.  It is a revolting provision which the Honourable Minster for Communications needs to immediately expunge.  

“It is also important to clarify whether NIPOST or its parent Ministry has powers to regulate the business of Logistics in the country.  The current NIPOST Regulation and Guidelines made copious reference to the business of Logistics.  The Lagos Chamber urges the Honourable Minister of Communications & Digital Economy and indeed the Federal Government to take urgent steps to clean up these regulations in the interest of the Nigerian economy, business continuity, private sector development, and job creation.  There is need to save the courier industry from a stifling and suffocating regulatory regime. The Nigerian courier industry is one of the most troubled sectors of the Nigerian economy at this time. Prior to Covid 19, the sector had been grappling with the following challenges: The sector is a major victim of disruptions foisted by the increasing adoption of digital technology as a dominant medium of information transmission. This include emails, text messages, social media platforms, etc. This has drastically reduced the demand for physical delivery of information. This include letters, greeting cards, dividend warrants, annual reports, academic certificates, examination results, among others. The impact of this disruption is very profound. Incursion into the business by many informal and unregistered operators, undertaking delivery of mails and parcels across the country, especially commercial vehicles that ply inter-state routes. Escalating cost of logistics resulting from high transportation cost, absence of functional railway system and poor road networks, among others. Multiplicity of taxes and levies by Federal, State and Local Government agencies.

“The foregoing limitations underscore the enormity of the challenges faced by courier companies in Nigeria. Most of them are in the Small & Medium Enterprise (SME) space, with little capacity to cope with these troubles. The onset of the covid-19 pandemic further complicated matters for these firms. This explains the outrage that greeted the outrageous increase in licence and renewal fees imposed on courier companies by Nigerian Postal Service (NIPOST).  Happily, the Honourable Minister of Communications and Digital Economy, Dr. Isa Pantami, promptly reversed the increase.  We commend him for that swift response.   However, beyond the fees, there are other fundamental regulatory issues that the Hon Minister needs to urgently address. These include:

“A framework in which NIPOST is both a regulator and operator is detrimental to the development of the courier business in the country. This is inconsistent with best practice principles of business regulations globally.   Currently NIPOST is vested with powers to regulate its competitors. This arrangement is unfair, inequitable, and inherently repressive. It is a negation of the ease of doing business policy of the Federal Government and inconsistent with the extant competition law of the federal republic of Nigeria. We therefore urge the federal government and the National Assembly to urgently remedy the situation”.

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