The Raging Concerns That Forced Nigeria to Stop NIPOST From Increasing Logistics License Fees

The Raging Concerns That Forced Nigeria to Stop NIPOST From Increasing Logistics License Fees

The decision of the Nigerian Postal Services (NIPOST) to introduce new licensing fees for logistics has been greeted with backlash. NIPOST had earlier in the week announced a new list of logistics categories and the cost of their respective licenses.

In a post entitled: Minister of Comm. Tech and Digital Economy approves the Reviewed Courier and Logistics Regulator, the courier service claimed that the Minister of Communications and Digital Economy approved the new licensing fees.

“The honourable Minister of Communications and Digital Economy Dr. Isa Ali Ibrahim Pantami, has approved a new Courier and Logistics Regulations in accordance with the powers conferred on him by Nipost Act. This is timely and coming on the heels of an upsurge of Small and Medium players in the Courier and Logistics ecosystem.

“Hitherto, courier business was for big players. Provision was not made for MSMEs. The approval of the reviewed Regulations has now accommodated all types of emerging enterprises in the logistics landscape and will provide a regulatory framework for licensing and the provision of effective and efficient services. The essence of regulating the sub sector is to sanitize the industry,” the statement said.

According to the new requirement, the application forms and regulatory guidelines costs N20,000 while the logistics licenses cost between N250,000 and N2 million.

The fee for international courier license is N20 million with renewal cost of N8 million, national license costs N10 million with renewal fee put at N4 million, regional N5 million with N2 million renewal fee. On the other hand, those applying for state license are required to pay N2 million and renew with N800, 000, while municipal and special SMEs are expected to pay N1 million and N250, 000, with renewal options of N250, 000 and N100, 000 respectively.

The move has been tagged insensitive and reckless because it is coming at a time when businesses are striving under the strains of coronavirus pandemic, and the decision appeared not approved by the regulator, the Ministry of Communication and Digital Economy.

As Nigerians took to Twitter to register their displeasure over the development, the communication minister, Dr. Isa Pantami’s attention was called to it.

“Good morning, Honourable Minister. Have you considered the effect of the NIPOST Courier License requirement on the digital economy, small business and self-employment?” Dr. Joe Abah asked on Twitter. “It appears to go against your vision. I would like to understand the logic please. Thanks.”

In response to this question, Dr Pantami said “the increase is under investigation by my office since yesterday. The Ministry and Minister were not involved,” and ordered NIPOST to put the implementation on hold.

“Please NIPOST, our attention has been drawn to an increase of license fee, which was not part of the regulation I earlier APPROVED for you. Your Chair and PMG were YESTERDAY contacted to put the implementation on hold and send a report to our ministry by Monday. Best wishes,” he wrote on Twitter.

Stating further, he reminded NIPOST that the power to effect such change lies with the Minister alone, and he is not considering exercising it now as it would impose further economic hardship on Nigerians.

“The power of regulation of NIPOST lies with the Minister. Any change of fee must be specific & be approved by him before implementation. I know the economic challenges of NIPOST. However, looking at the economic hardship of citizens, we need to suspend any move,” he said.

While the swift response of the Minister is being applauded, the development has drawn attention to the fact that NIPOST tried to play double; being a player in the courier sector and at the same time playing the regulator.

It is one of the reasons Nigerians stand against it, as it means putting many courier services, which have been deemed more efficient than NIPOST itself, out of business, and consequently make life difficult for SMEs who depend on the courier ecosystem to stay in business.

“Does NIPOST even know there’s a pandemic, and that the world has been shut down over that?” Gimba Kakanda asked. “Instead of announcing grants and subsidies to keep small businesses afloat in the fashion of responsible governments in countries with thinking leaders, they chose cruelty.

“The same country that grants big businesses tax waivers is here to kill courier and logistics firms, which are mostly new and owned by youths. For a country with unbelievably high unemployment rate, this is both insensitive and unwise. Nigerians deserve better.”

Many more condemnations followed under the hashtag #SayNoToNipostFee.

“I think the powers that be in the Nigerian government wake up every morning and think “how do we increase the level of poverty and suffering in the nation. This NIPOST dastardly attempt at cutting down entrepreneurs must not be allowed to fly,” Uchenna Daniel wrote on Twitter.

“How much does the average logistics business make per month with a bike or two? Dr. Nonso Egemba asked. “Yet you’re requesting them to pay one million naira for a license! How much does the online vendor make per day? You’ll stifle many businesses struggling to survive.”

The Nigerian Postal services had justified the move saying there is SMEs upsurge, when the subsector is actually riddled with unfavorable fiscal policies and infrastructural deficiencies that stymie business growth.

Earlier in the year, the Lagos State government announced the ban of motorbike ride-hailing operation, which is part of the transport sector that had hundreds of youth under its employ. Many of those who were laid off due to the ban switched to logistics. Gokada, ORide and Max had to sell their fleet of motorcycles, and those who bought them have only one objective – to start courier services as the law allows for that.

With over 30% youth unemployment rate, it is regarded as insensitive for the Nigerian government or its agencies to make rules that will deprive the youths their means of livelihood, especially in the wake of global health crisis bearing a venomous fangs on economies. Other countries have been waiving taxes and subsidizing utility bills to keep people and businesses afloat.

Ghanaian government has reportedly extended its free supply of electricity and water for its citizens for another three months, at the same time, the Nigerian government is introducing six percent stamp duty charge on rents.

Many including Dr. Pantami believe that it’s the wrong time to introduce levies and tariffs. He said: “Due to the pandemic and economic hardship. I believe it is the right time to reduce, not to increase any tax or tariff.”

Others have expressed concern that if left unchecked, the governments and its agencies will introduce laws that will drive people to suicide.

“NIPOST should not be allowed to charge these ridiculous fees. Thousands of young Nigerians have lost jobs in the last few months. Some turned to courier services. a friend who lost his job bought these (two motorcycles) from ORide. Please don’t let him commit suicide,” Dr. Dipo Awojide wrote.

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