Courier and logistics businesses in Nigeria are facing a double whammy of coronavirus crisis and license fee hike in a country with a bad name for difficulty of doing business.
It is no good time for an industry whose vibrancy has leveraged digital ingenuity, resourcefulness of the young, and enlarged investors’ interest that has boosted value delivery across virtually all economic sectors.
If e-commerce is the latest sweetheart of global trade, then logistics is the former’s mainstay, for it is the connecting factor of the two ends of its value chains.
“An industry that has such huge assets, should have government’s recognition. Out of the N1 trillion worth of assets, only about 20 per cent of the combined market of courier, logistics, transport and management is currently being utilised across Nigeria,” Simon Emeje, who heads Nigeria’s Courier Regulatory Department, an autonomous unit of the Nigerian Postal Service (NIPOST), said last year.
If this is a fair view of the courier and logistics market from a top industry insider, and if indeed it holds a promise that huge, it is safe to say therefore that, with the recent license and renewal fees hike for courier and logistics operators, the Nigerian government is on course to retard a sector capable of advancing the economy enormously and shrink national revenue sources it said it planned to diversify.
NIPOST, which has been handed regulatory role under the new policy shift, last week upped international licence fee (for courier services like DHL, Fedex and UPS) from N10 million to N20 million and national licence fee (for services like GIG Logistics) from N2 million to N10 million. Licence fees for new categories are N2 million for state, N1 million for municipal and N250 for special SME.
Renewal of all licence classes is chargeable at 40% of their costs.
‘Our attention has been drawn to an increase of licence fee, which was not part of the regulation I earlier APPROVED for you.
‘Your Chair and PMG (Postmaster General) were YESTERDAY contacted to put the implementation on hold and send a report to our ministry by Monday. Best wishes!,’ Communication and Digital Economy Minister Isa Ali Pantami said on its Twtitter handle, @DrIsaPantami on Saturday following a backlash from Nigerians on the social media.
That NIPOST, itself a player in the courier and logistics market, is now the industry’s watchdog makes the communication ministry’s decision a move against the spirit of fair play and implicitly makes a government agency known for decrepit infrastructure and questionable efficiency a model for digitally enabled operators like DHL and GIG Logistics.
It is speculated that the licence fee reform has a larger ambition of shutting out start-ups and small courier and logistics firms out of the market beyond the guise of generating more income for government in these hard times.
It could give NIPOST an undue advantage above others the same way state-owned Nigerian National Petroleum Corporation (NNPC) enjoys lordship status over other oil and gas firms in the country’s petroleum industry.
Until May, for instance, NNPC wielded the monopoly of fuel importation and is technically the sole importer of the product today given oil marketers inability to source for dollar in the aftermath of the current foreign exchange crunch.
As Africa’s largest economy reels from the hit of the coronavirus pandemic and growth slows across virtually all sectors, government’s reckless fiscal aspiration might prove a kiss of death for the market.
Globally, supply chain disruption is one of the gravest outcomes of the pandemic outbreak, making the logistics trade a natural casualty and it is out of place that a sector that needs stimulus to regain its footing is instead burdened with licence increase.
In a state like Lagos for instance where motorbikes were swiftly converted for dispatch services after government barred them for taxi purposes in January, unemployment could fester if it does not trigger a crime wave.
It stands to reason that Pantami stay implementation of the new guidelines as he said in its Tweet in order to give operators the breather they need in these turbulent times.
Engagements targeting disruptive reforms that will have industry-wide stakeholders as policy-makers, and that will seek a reasonably liberalised market unfettered by needless regulatory hurdles, are also needed to develop the nation’s logistics trade and ease capital inflow.
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