MON, NOVEMBER 26 2018-theG&BJournal-The Lagos Chamber of Commerce and Industry (LCCI) has issued its first ever warning about shutting out private sector investments in the Courier business in the country, as the House of Representatives prepares to give its consent to the Nigeria Postal Commission Bill currently before it. The bill has already been passed by the Senate.
LCCI’s alert highlights the concerns of players in the sector who are already struggling under what they say are excessive levies by various agencies of government.
The LCCI in a memo signed by its Director General MUDA YUSUF, say they are particularly worried by provisions in the Bill that are not consistent with the espoused commitment of the National Assembly to private sector development.
The provisions in question are the imposition of an annual levy of 2.5% of the turnover of courier companies to be paid to the proposed Postal Services commission;
- Powers conferred on the proposed Postal Services Commission to fix rates for courier services;
iii. Monopoly privilege conferred on the Nigerian Postal Service for delivery of items weighing 1kg and below.
‘’The bill is inimical to private sector investments in the Courier business; it is a negation of the Ease of Doing Business Agenda of the Federal Government and not in consonance with the fundamental principles of the Economic Recovery and Growth Plan [ERGP],’’ LCCI said.
‘’We request that the bill be urgently reviewed by the National Assembly in the interest of economic progress and the welfare of citizens.’’
The Chamber said that the passage of the bill in its current form will put over 100,000 jobs in the courier sector at risk. It said it will as well put over N300 billion investments in courier services business in jeopardy, noting that it would further worsen the country risk rating of Nigeria with the country already grappling with enormous perception problems by investors.
‘’No sector of the Nigerian economy is subjected to such an arduous regulatory provision. Overregulation of any sector of the economy, will not serve the best interest of the Nigerian economy and would undermine the capacity of investors to create jobs.’’
LCCI listed specific areas of concern on the bill as follows: Requirement for Licensees mainly courier companies] to Contribute 2.5% of Turnover for the purpose of funding the proposed Nigeria Postal Service Commission.
Section 39(2) (e) requires licensees to contribute 2.5% of their turnover to the Commission’s fund. This will impose considerable burden on courier companies.
‘’This is outrageous, having regard to the numerous taxes and levies already being paid by the courier companies. These include the company tax of 30%, VAT, , education tax, airport charges, FAAN Charges, several taxes imposed by the states of the federation, local government charges, signage fees of various states, etc.’’
Rate Fixing
The bill proposes that courier companies shall not charge any rates or tariffs unless approved by the Commission. Section 17(2) criminalizes charging rates not approved by the Commission.
LCCI dismissed this provision as a complete negation of the key principles of private enterprise, which the ERGP is seeking to promote.
‘’This would amount to an overregulation which should not happen. Courier service is not a social service, it is a business which should allow for each player to design its business model for survival and sustainability,’’ it added.
Even social services such as education and health services offered by private providers are not subjected to such an overbearing pricing legislation, the Chamber noted. It says that the best way to protect consumers is to ensure a virile competitive environment among service providers, not by fixing rates. Rate fixing for courier companies is not only counterproductive but would stifle investment in the sector and give very adverse signals to potential investors in the economy.
The Public Postal Operator’s Exclusive Power over Postal Articles Weighing up to 1 kg
Section 11 (1) of the Bill states that the Public Postal Operator shall have exclusivity over the delivery of postal articles weighing up to 1 kg.
‘’This is creating a monopoly situation which is inimical to private investment and in conflict with the ERGP, the Ease of Doing Business Policy of the present administration, and the interest of the citizens. The citizens should have the freedom to choose whichever way they want to transmit their articles or any products whatsoever. The monopoly story of the defunct NITEL is instructive and dictates that such legislation should not see the light of day.’’
‘’We appeal to the National Assembly to expunge the disturbing provisions highlighted above before progressing with the consideration of the bill.’’
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