The Lagos Chamber of Commerce and Industry (LCCI) has warned against the passage of the Nigeria Postal Commission Bill in its current form, saying such was capable of jeopardising about N300 billion investments in the courier services business.
Director General of LCCI, Mr. Muda Yusuf, while cautioning against the anti-investor friendly bill, said it negates 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), which seeks to promote and incentivise private sector investment.
LCCI equally raised the alarm that the passage of the bill in its current form will put over 100,000 jobs in the courier sector at risk, adding that this would further worsen the country’s risk rating as the country is already grappling with enormous perception problems by investors.
LCCI maintained that the bill, which is currently before the National Assembly and has been passed by the Senate, while also awaiting concurrence by the House of Representatives, should be halted and the hurtful provisions expunged.
LCCI pointed out that it was particularly worried about some provisions of the bill, which included imposition of an annual levy of 2.5 per cent of the turnover of courier companies to be paid to the proposed Postal Services Commission (PSC); powers conferred on the proposed PSC to fix rates for courier services and monopoly privilege conferred on the Nigerian Postal Service for delivery of items weighing 1 kilogramme 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 anarduous 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,’’ LCCI advised.
The chamber said 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. Section 39(2)(e) requires licensees to contribute 2.5 per cent 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 per cent, VAT, education tax, airport charges, FAAN charges, several taxes imposed by the states of the federation, local government charges, and signage fees of various states, amongst others.
On rates fixing, the chamber explained that 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. 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.
Even social services such as education and health services offered by private providers are not subjected to such an overbearing pricing legislation. 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.
‘‘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 kilogramme. 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,’’ LCCI stated.