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Close to 90% of courier operators in Kenya are unlicensed

By Frankline Sunday | April 7th 2016

Nine out of ten courier operators are unlicensed and deny the taxman millions of shillings in revenue annually.

The unregistered and unregulated players are further accused of compounding the woes of the struggling Postal Corporation of Kenya (PCK) and in the process threatening the financial survival of the State parastatal, according to findings of an ICT gaps study released on Tuesday.

The report by Canadian research firm, Intelcon, and commissioned by the Communication Authority of Kenya, says there are 141 licensed private courier operators in the lucrative sub-sector.

“But the number of operators in the country could be over 1,000, according to Courier Industry Association of Kenya (CIAK), making legitimate businesses not to see any value in  being licensed by the Communication Authority (CA),” reckoned Andrew Dymond, lead researcher at Intelcon.

The report notes that the unregulated majority of courier operators are cheating Kenya’s industry regulator (CA) out of key revenue source worth millions of shillings in respect of licence fees. According to data from the industry regulator, revenue from the country’s postal and courier sector grew by 20 per cent, up from Sh7 billion collected in 2013 to Sh8.5 billion collected in 2014. This means that if all the other courier operators are duly registered, revenues from the sector could run into the tens of billions, providing the taxman with a sizeable revenue stream annually.

Courier traffic in the country continues to register mixed results, with the number of letters posted locally dropping by 17.2 per cent while the volume of letters received from other countries increased by 11 per cent in the first quarter of the 2015/2016 financial year.

The number of courier items is further said to have decreased by 3 per cent in the same period of time.

Intelcon has recommended that the government develop a stand-alone policy for the country’s postal sector in order to ensure uniformity in the sector as well as set standards to be adhered to by all operators.

“The policy should reflect the latest policy imperatives present in the Vision 2030 policy and the 2010 constitution and based on evidence and diagnosis on issues specific to Kenya, instead of replicating policies from other markets which have different conditions,” read the report in part.

In addition to this, the Ministry of Information has been asked to hasten the development of the National Addressing in order to make it easier for courier operators to grow the revenue potential of e-commerce.

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