Nigeria : N300bn investments in courier industry under threat by Postal Commission Bill 2018 – LCCI

Business News

Lagos Chamber of Commerce and Industry (LCCI), yesterday , express its deep reservations over the Nigeria Postal Commission Bill currently before the National Assembly.

“It will as well put over N300 billion investments in courier services business in jeopardy,” said LCCI in its position document signed by Muda Yusuf,  its Director -General.

“We submit that 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].  Regrettably, the bill has been passed by the Senate, awaiting concurrence by the House of Representatives.  We appeal that the progression of the bill be halted and the hurtful provisions expunged.”

LCCI,  said it is worried, in particular, about the following provisions in the bill:

“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;

“Monopoly privilege conferred on the Nigerian Postal Service for delivery of items weighing 1kg and below.”

“ All these provisions are not consistent with the espoused commitment of the National Assembly to private sector development which was affirmed by the Senate President, Dr Bukola Saraki, at the inauguration of the National Assembly Business Environment Roundtable [NASSBER] in March 2016.    No sector of the Nigerian economy is subjected to such an arduous regulatory provision.  We request that the bill be urgently reviewed by the National Assembly in the interest of economic progress and the welfare of citizens.

The passage of the bill in its current form will put over 100,000 jobs in the courier sector at risk.

“This would further worsen the country risk rating of Nigeria.  The country is already grappling with enormous perception problems by investors.

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.  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.

This is not in consonance with the current Ease of Doing Business Agenda of Government. It is also not in tune with the letters and spirit of the Economic Recovery and Growth Plan [ERGP], which seeks to promote and incentivise private sector investment.  This provision would impose an unbearable burden on courier companies in the country.”

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. This provision is a complete negation of the key principles of private enterprise, which the ERGP is seeking to promote.

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