A Bill to repeal the Nigerian Postal Service Act is presently before the House of Representatives. The intendment of the bill, if passed into law, is to implement the National Postal Policy with the objective to establish a regulatory framework for the Nigerian postal service and for this purpose, to create a supposedly effective, impartial and independent regulatory authority.
The bill also looks at promoting the provision of a modern universal, efficient, reliable, affordable and easily accessible postal service with the widest range and coverage throughout Nigeria; encourage local and foreign investments in the Nigerian postal industry and the introduction of innovative services and practices, in accordance with international best practices and trends.
The intents of the bill are no doubt in the overall interest of the citizens having in mind a level playing field for competition in all sectors of the Nigerian postal industry and encouraging participation of Nigerians in the ownership, control and management of postal organisations.
In the opinion of this newspaper, the bill will encourage the development of postal, manufacturing and supply sector within the Nigerian economy and promote effective research and development effort by all postal industry practitioners, and protect the rights and interests of service providers and consumers within the country if Nigerian Postal Service did not play the role of a regulator and that of a competitor at the same time.
Therefore, it is our opinion that the National Assembly should ensure that the needs of the disabled and elderly persons are taken into consideration in the provision of postal services. They should also ensure an efficient management, planning, coordination, allocation, assignment, registration, monitoring and use of national resources in the postal sub-sector while promoting and safeguarding national interest, safety and security.
Again, as beautiful as the bill is made to be, we feel there is a lacuna that must be addressed by the authors so that the overall interest of the development of the nation’s postal industry can be achieved at the end of the day. The lacuna lies in the exclusive rights of the Public Postal Operator. Clause 10(1) states that the Public Postal Operator will have exclusivity over the delivery of postal articles weighing up to 1 kg.
The bill also says the Public Postal Operator shall be the only competent authority to charge and collect proceeds from the sale of adhesive and or electronic stamp for the purposes of denoting, authenticating and validating receipts, documents and other instruments.
As currently drafted, it suggests that even if there are consumers who wish to use other courier services to transport time-sensitive documents internationally, that courier company would be violating the Public Postal Operator’s monopoly by doing so.
We are concerned that such implicit monopolistic roles are not good enough for competition in a supposedly free market environment. The danger, in our view, is that it could make the industry less attractive to investors and lead to loss of jobs. The bill will be more destructive than reformative if it is passed into law in its present draft. It is pertinent for some clauses to be rephrased or outrightly expunged in the interest of fair play.
The legislation also proposes levies on the revenues of all courier businesses operating in the country. These measures will further compel consumers and businesses to use the Nigerian Postal service instead of express service companies. If this provision of the bill is allowed to stand as it is, there is the probability that local businesses may suffer to the point of closing shop. It is important to point out that some of these companies are foreign and there will be implications for investment inflow from offshore.
Again, the per centage on gross revenue in addition to annual licensing fees will impact negatively on profit before tax by over 30 per cent which technically is a doubling of company income tax (CIT). The implication is that the industry will be made less attractive to investors.
In our considered opinion, such broad restrictions could force Nigerian businesses and consumers to send an estimated 65 per cent of their packages through the Nigerian Post. Countries without competitive, high-performing logistics sectors have been shown to attract less foreign-direct investment and incur higher costs for doing business and slower delivery times.
We, therefore, call on the National Assembly do a thorough job on the bill to avoid worsening the situation they are attempting to correct. The lawmakers should insert a provision in the bill to allow courier companies to provide their services in respect to documents with weight of less than 1 kg if sought by the customer provided they charge no less than three times what the Public Postal Operator charges for a similar package.
The lawmakers should take into consideration all of the issues that may hinder growth and development in the industry in line with the ease of doing business policy of the federal government.