Examining the Propriety of the NIPOST Regulations under National Enactments
On the 23rd of July 2020, the Nigerian Postal Service (“NIPOST”) released new operational guidelines for courier and logistic operators and which they dubbed “Courier and Logistics Operations 2020”. This guideline was issued following the approval of the Federal Government via the Minister of Communications and Digital Economy, Dr. Isa Pantami.
The new price table contained within the guidelines became public on the 25th of July, 2020 and was met with public outrage as a result of the hike in courier licence fees. The new charges introduced by NIPOST were specifically propped by a 400% and 100% increase on the national and international licence fees respectively. The price for obtaining a new national licence fee was increased from N2 million to N10 million while the international licence fee moved from N10 million to N20 million.
The prices for renewal of both were also increased to N4 million and N8 million for national and international licenses respectively. New categories were also inserted to cover regional, state and municipal category licences. Predicting that the new licence fees would, in turn, hike the prices of courier services, Nigerians via social media, expressed their anger over the outrageous prices and a petition was created to prevent the implementation of these changes.
On the same day, following the outrage, the Minister for Communications and Digital Economy, Dr. Isa Pantami, officially stated that his final approval was not obtained before the new fees were released and issued a directive halting its implementation.
Other than the negative economic effects this single occurrence may have on Nigerian citizens which call into question its propriety, these changes are directly averse to the provisions of various legislations, all of which are examined in this work.
The Validity/Propriety of the NIPOST Regulations under National Enactments
NIPOST Act
The Nigerian Postal Service is established by Section 1 of the Nigerian Postal Service Act 1992. Section 44(3) of the Act gives the Minister the power to prescribe fees payable upon an application for a courier licence by a registered company applicant. The interpretation section of the Act defines the word “Minister” as “such minister charged with responsibility for postal matters”.
Presently, the Minister responsible is the Minister of Communications and Digital Economy, a minister who claims that his final approval was not sought and obtained before the new fees were published. This contravenes the provision of section 44(3) and Section 62(a) of the Act which gives the Minister the power to make regulations on any matter relating to courier service companies. As his consent was not obtained, the guidelines/regulations issued can be assumed to be ineffective.
The FCCPA
Another enactment which the present circumstances potential activate is the Federal Competition and Consumer Protection Act 2018 (FCCPA). The FCCPA aims at promoting competition in the Nigerian markets at all levels by eliminating monopolies, prohibiting abuse of a dominant market position and penalizing other restrictive trade and businesses practices. Section 59 of the Act prohibits agreements which restrain competition and (2)(a) states that such prohibited acts or agreements could include directly or indirectly fixing a purchase or selling price of goods or services.
Although section 60 (a) – (c) of the Act contains a proviso which states that section 59 shall not apply to certain agreements which have been approved by the Commission, it is clear judging from the national outrage and also from an economic standpoint that the recent action by the NIPOST has disadvantages which outweigh any advantages that may have engineered its creation.
Furthermore, section 72 of the same Act prohibits any abuse by one or more undertakings of a dominant position in a market. Such abuse could include charging an excessive price to the detriment of consumers or refusing to give consumer access to an essential facility when it is economically feasible to do so.
In this regard, it is important to note that the NIPOST has an arm focused on providing courier/logistic services called the “EMS/Speedpost Nigeria”. In applying the aforementioned provisions of the FCCPA, the recent regulations published by NIPOST may fall under the earlier mentioned provisions which prohibit restrictive agreements and the abuse of a dominant position in a market to the detriment of both consumers and other competitors.
The Stamp Duties Act and the Finance Act:
Section 4(1) of the Stamp Duties Act exclusively empowers the Federal Inland Revenue Service to be the only body to impose, charge and collect Stamp Duties on dutiable instruments where such instruments are executed between a company and an individual, group or body of individuals. This position is reiterated by the Finance Act of 2019 and the FIRS public notice which was released on the 20th of July 2020, which also clarified a recent stamp duty controversy occasioned by the enactment of the Finance Act.
The Finance Act, which was passed in November 2019, officially entrusted the collection of stamp duties to the FIRS, replacing NIPOST as the regulatory agency saddled with this responsibility. This action led to protests by NIPOST workers in December which in turn resulted in a press release by the Minister of Communications & Digital Economy on the 8th of January, 2020, approving NIPOST as the collecting agency for stamp duties.
This position was upturned in April 2020 and later in July by public statements made by the FIRS clarifying that the collection of stamp duties was the sole responsibility of the FIRS. The FIRS insists that the charging and collecting of stamp duties is its responsibility and statutory duty. NIPOST, on the other hand, argues that taking away such power from the body would make revenue goals unattainable and lead to loss of jobs, a position which is, quite frankly, unsupported by law.
This tug of war between the NIPOST and the FIRS could be said to have premeditated the recent regulations and outrageous fee hike by NIPOST. It is clear that NIPOST needs to move on and establish an alternative means of revenue generation rather than disputing the FIRS’ statutory duty.
Conclusion
The public outrage which met the publication of the NIPOST Guidelines is evidence of dissatisfaction occasioned by this regulation on players within the courier/logistics market, a market dominated predominantly by micro, small and medium-sized enterprises (MSMEs). These regulations will not only have long-lasting detrimental effects on MSMEs and create a hostile environment for new businesses and investors alike, but it also upsets the letter and spirit of existing legislation.
Also, NIPOST’s conduct goes contrary to the Federal Government’s goal of improving the ease of doing business in Nigeria as reflected in the efforts of the Presidential Enabling Business Environment Council (PEBEC) and detailed in National Action Plans series published between February 2017 and April 2018. These steps were prompted by Nigeria’s ranking in the World Bank Ease of Doing business 2017 and are geared towards improving the business environment in the country specifically for MSMEs. Accordingly, NIPOST regulation needs to be revised or revoked entirely.
Moving on, it is suggested that market prices should not be arbitrarily fixed or controlled by a single body, especially where such body is also a dominant market player with an interest, even minimally, in securing a monopoly and adversely affection the competing entities.
If the current position prevails, such bodies must be reminded by the justice system of the punitive measures which could be meted out against them as a result of such reckless decision making.
As earlier mentioned, it is safe to assume that the recent regulations were birthed by the tussle between the FIRS and NIPOST and the need for alternative revenue-generating sources for NIPOST. While the revenue deficit occasioned by the Finance Act is noted, the imposition of exorbitant fees is not advisable in light of existing law and ease of doing business policies. As such, NIPOST must seek alternative revenue generation sources.
The retraction of the said regulations has been recommended by the Minister and hopefully, will be fully implemented. Moving forward, one can only hope that any future amendments to the current regulations would not be a repeat of the past and would consider both the local and international entrepreneurial/business markets.
