Nigeria set to regulate logistics sector, met with stiff backs

There have been talks around the regulation of logistics companies in Lagos for months, with the Courier Regulatory Department, the regulatory part of Nigerian Postal Service (NIPOST) having shared a letter showing a new licencing regime in May. On Saturday, July 25, concerned Nigerians vented out their grievances by using the hashtag #SaynotoNIPOSTfees to protest new regulations imposed on logistics companies.

Although the regulations are from the federal government, there’s hardly any city where the effects would be felt as much as Lagos, Nigeria’s commercial capital. In Lagos, dispatch riders have been popular for years. In a congested city struggling with bad roads and traffic, moving things around is a service that is always in demand.

Because of their dexterity, motorcycles are the way to deliver items to the many customers who expect their items on the same day. There’s a shortage of trust in Lagos and it means that same-day deliveries are a way to allay some fears. In June, Safeboda, a dispatch company, celebrated 100,000 rides in Ibadan. It was a reminder to mobility players in Lagos of what might have been. And now new regulations may also see small logistics companies struggle.

While small-scale dispatch businesses are more popular for same day deliveries, a lot of the big courier companies provide the same service. But their pricing is steep. The cost to send a small parcel from Lagos to Abuja with a logistics company ranges from ₦4,000 upwards ($10). That is almost half the fare to travel from Lagos to Abuja.

This type of pricing provides an opportunity for independent delivery services to find a foothold in the market. With a few motorcycles, entrepreneurs offer cheaper and flexible delivery services to small and medium businesses.

While they serve small businesses, some of these dispatch services also partner with the big courier services to help them deliver orders. It shows that despite the small scale of their operations, they’re an important part of the logistics sector. But plans to enforce regulations in the sector may see them struggle in a sector that is already difficult to thrive in.

The requirements listed on the website of the Lagos State Employment Trust Fund (LSETF) guide the operation of a delivery business in Lagos. In addition to registration of each motorcycle in a fleet, the courier company has to be registered with the Federal Ministry of Communication and Technology and registration is done with Nigerian Postal Service (NIPOST). Failure to go through due process of registration can lead to arrest and impounding of the motorcycle.

The new registration and licencing process the LSETF references in its website is handled by the Courier Regulatory Department (CRD), a specialised arm of NIPOST.