Few days ago, The Nigeria Postal Service (NIPOST) introduced a new set of charges that required operating courier services across the country to pay the agency for licences to operate. Beyond this, each courier service has to submit documents that could influence NIPOST’s decision to grant a licence or not. The new charges which rivalled the setup costs of new courier services ranged from 20 million naira to 250,000 naira per year depending on the cadre these companies do business. While public outrage caused the Minister of Communications and Digital Economy, Dr Isa Pantami to demand NIPOST to suspend the new tariff on registration of courier services, it does not change the dubious situation where a player in the logistics industry is also acting as the regulator of that industry and attempting to use its taxation powers to suffocate the others players in the market.
In the past few months, especially after the government placed a nationwide lockdown effectively forcing many businesses to operate from home, online retailing provided the leeway for several companies to stay alive. Due to the positive flux of online services, a supporting logistics sector rose in its number of players. This made sense to enable goods to be delivered to people who are unable to leave their homes. Asides this, as the Lagos State government placed a ban on motorcycles, several transportation workers turned their assets to the logistics sector. This simply required them to invest in a bag or delivery box fitted to their motorcycles. With little branding, several small couriers emerged and managed to stay afloat while the economy took a downturn. A boost in online retail also meant that effects on the dwindling naira could be further mitigated while customers were able to access important goods whether far or near.
In the same period, NIPOST was receiving scrutiny for its years of failure. Among others, the organization had lost its stamp duty revenue to a fellow government agency, the Federal Inland Revenue Service while the government sought to carve out three subsidiary companies out of it. The Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh had identified these companies to be NIPOST Properties and Development Company; NIPOST Transport and Logistics Company; and NIPOST Microfinance bank Limited. In a scramble to retain its relevance, the agency, which oversees the Courier Regulatory Department (CRD) that registers and regulates the logistics market and also EMS/Parcel Nigeria which runs a delivery service, introduced a new set of bogus charges as it tried to stamp its feet as a regular of the industry – especially in a way that ensured it made ridiculous amounts of money at the expense of business owners in a name of licensing fees. At the same time, the agency invested more in delivery vehicles to raise its play in the logistics market. They then try to cover their dubious actions by their sudden urge to help people protect their items from bad logistics companies.
It is difficult to forgive such lack of insight and empathy – when licensing fees rival startup capital, not even taking into account all the other legal and duplicated levies banded on these logistics companies. The agency definitely does not need that amount of money in registration to be able to determine the legitimacy of players in the market. All the information can be supplied to the agency for free. Draconian measures like this ensure customers who were able to access products and services beyond their vicinity might now have to pay through their noses for such access or limit their choices to their surroundings. This development effectively limits the choices of consumers by reducing the players in the logistic sector and increasing the delivery cost of goods.
It is an absurd arrangement for NIPOST which runs a commercial delivery service to regulate other delivery service providers. In a country where the government is notorious for decimating the progress of local business initiatives, reigning an agency with such power renders the space unhealthy for local players. NIPOST becomes a yardstick in an industry it has repeatedly failed at making progress. This anomaly needs to be addressed and very quickly too.
In the past, another public entity had given way for new entrants in the telecommunication industry. Before then, NITEL operated as a monopoly until 1992 when a regulatory body Nigerian Communications Commission was created and new entrants were allowed. This decision was eventually vindicated when NITEL continued on the path of underperformance and never actually met the standards that private organizations set subsequently. Several attempts were made to save NITEL from going down, but its assets were handed over to NATCOM (Ntel’s parent company) in a deal worth $252 million in 2015. The success of the telecommunication industry has been attributed to allowing private organizations to provide key services to the public while allowing the market to sift for excellence.
NIPOST playing both player and referee is a recipe for disaster. Logistics is a foundation of trade and disruptions in logistics easily raise costs of trade and prices in the market – thus leading to loss of jobs and higher costs of living.