Government policy is the major source of business failure in Nigeria, assuming the owner of the business is not a politician or has friends who are policymakers in high places. This is a statement of fact. If there was an index to measure ease of doing business in countries, Nigeria would not even be on the list, that is how bad doing business is in Nigeria. In economies that encourage enterprise, government make policies that encourage MSMEs and start-ups, create an environment that makes it easy for them to thrive. This is not in Nigeria. In Nigeria, policymakers wake up every day, and think of ways to frustrate and kill businesses. Being an entrepreneur or business owner in Nigeria takes a different kind of wit, it is almost as if the government is jealous and does not want to see legitimate small and medium enterprises start, grow and blossom. Between 2017 and 2020, it is unbelievably insane, the number of start-ups that have failed in Lagos alone solely because of government policy. You cannot innovate your way out of bad government and policy, it is unbelievable.
If you run a logistics or courier business in Lagos, you must deal with KAI, the Police, Lastma, Local Government, LASSA, and even vigilantes. These guys are constantly exploiting you, frustrating your staff and business. Did I mention you have to cough out a million naira to Nipost too?
I came across a headline online that read “The Minister of Communications & Digital Economy, Dr. Isa Ali Ibrahim Pantami has approved new guidelines “Courier and Logistics Operations 2020” to enhance the operations of courier and logistics services in Nigeria.” And I have some questions and no, it is not about why the minister has four names. Why is the minister of communication in charge of Nipost? Logistics and communication are quite different, so why is the communication minister overseeing a logistics agency? This question is not as important as why I’m writing this today. Apparently, under the new approved guidelines that was approved by the minister, through a process that was not communicated to the public, there are six new categories of licenses for courier operators and logistics companies. This article was reposted on the twitter handle of Nipost, praising the initiative of minister in including SMEs in the new licensing guideline. Wow, such a considerate administration, that has SMEs at heart and truly wants them to succeed. SMEs that have failed previously in the Courier business can now finally succeed, because there is a new licence category for them.
But what the tweet failed to mention was the cost of said license and how it has a one-year validity. Looking at the categories, it appears they are categorised according to scope of operations, so what constitutes an SMEs license? Considering that the next level after SME, is Municipal or intra-city and it cost N1m per annum. This means that if your courier service delivers within a city in a state in Nigeria, it needs a Municipal license to operate, and that cost N1m to obtain, and another N400,000 to renew annually. The SME license cost N250,000 to obtain, and N100,000 to renew annually. Again, to my question, what constitutes an SMEs? Operating within a street?
Did I mention you have to pay taxes too? Haha. Forget it. The crazy part about this nonsense is that logistics is at the centre of distribution. All the sectors rely heavily on efficient logistics to succeed. Therefore, SMEs have started entering the sector lately. Imagine that the policies were different, and more operators are encouraged to enter the business. This will open the sector and encourage competition which will further drive the sector to grow, and in turn help the other sectors that rely on it. But no, let us kill the sector before it begins to grow.
Countries are innovating in logistics. Autonomous delivery with drones and self-driving cars, same day delivery, integrated and automated warehousing. You have the likes of Ubereats and Delivero partnering with restaurants and food businesses and using bicycles to deliver food. But in Nigeria? Let us dream of ways to frustrate innovation and enterprise. Imagine dreaming of running a food delivery service that uses bicycles in Lagos, I can already think of a hundred things that could go wrong, with Nigerian government contributing to eighty of those.