BusinessDay

The urgent need to reposition Nigeria’s Postal Service to be more competitive

Nigeria’s E-commerce industry has capacity of tripling its current performance if it is well managed and given the necessary attention.

When this is done it will help reposition the industry to be more competitive; activate growth in the nation’s economy, create businesses, employment as well as attract more investment opportunities.

Nigeria’s Postal Service (NIPOST) is one of the nation’s core industry that needs to be urgently upgraded to be more productive, efficient and customer responsive just like its peers in other countries. This is because it has great potentials and needs to be stimulated for more growth, promote globalization and facilitate the rise of e-commerce in Nigeria.

It is important to state that postal services are a critical part of every economy globally and their roles are crucial to economies of nations. There is not one family in any nation that isn’t affected directly or indirectly by the services their postal agency renders.

While the emergence of modern digital technology and information system is needed to drive positive change in organisations, it is important that Nigerian government support its postal service by investing more in digital technology usage to curb the consistent loss of customer’s parcels, violation of mail items and delays.

Adoption of the use of modern technologies system (such as GPS, block-chain, IoT, machine learning, etc) will help facilitate tracking of parcels and boost traceability. With the help of anti-theft GPS, near real-time locations of parcels can be received as well as separation of parcels in transit.

This would also help boost extra security measures to avoid loss of parcels belonging to customers. If at the time of collecting parcels from a customer a real time information is sent to the customer after first scan, it will be almost impossible for the agency to deny responsibility of loss of parcels.

Blockchain technology, which is another modern digital system, can also be used to monitor, distribute, move and trace parcels as well as update records and performance. The use of internet-of-things (IoT) sensors can also be used to determine the amount of space a cargo occupies as well as calculate shipment cost upfront unlike what is obtainable at the Parcel Processing centre at Ikeja.

The act of Nigerian Postal Service using manual outdated processes are unsustainable and this is responsible for decline in customers and mail volumes. This has made the Nigerian Postal Service unattractive and less competitive when compared with its competitors in the private sector e.g. FedEx, DHL, 3rd party agents, to mention a few.

Though we have post offices in all nooks and crannies of Nigeria giving it an advantage over other players in terms of spread, regrettably it has not been able to leverage this as strength.

While Nigerian Postal Service (NIPOST) generated a total of N19.7 billion in 2018 (N7bn from its core operations and N12.7bn from electronic stamp duty), it is sad to note that the agency’s performance has further spiralled downwards since 2018.

It is also Interesting to note that in June 2021, Nigerian Senate passed the NIPOST repeal and re-enactment bill, which had restricted the agency to only postal operations in the country, it has not been able to capitalise on the advantage in our population (more than 200m people) as well as the growth of e-commerce industry due to the recent pandemic to grow.

Nigeria’s e-commerce market was estimated at approximately $12 billion and this also has not reflected on the performance of the Nigerian Postal Service. In addition, revenue in Nigeria’s ecommerce market is projected to reach $8.5 billion in 2022 and its revenue is expected to show an annual growth rate (CAGR 2022-2025) of 13.86 percent, resulting in a projected market volume of $12.58 billion by 2025.

The poor performance of the agency is partly responsible for why aggrieved operators of National Mail Route Delivery Service (NMRDS) few months ago urged the Minister of Communication and Digital Economy, Isa Pantami to take drastic action over the failure of the NIPOST to redeem the liability to their members in the last eight months or face legal tussle.

While the seven-day ultimatum issued then by the Counsel to the NMRDS, Wole Abidakun bothered on failure of NIPOST to pay the N200 million owed the operators, the tax deductions effected on the operators’ account for the past five years by NIPOST were not remitted to the Federal Inland Revenue Service (FIRS).

They claimed this had hindered the operators from accessing their tax clearance over the years and has made it difficult for their clients to survive in addition to restricting them from bidding for jobs in other organisations.

The petition was also sent to the Postmaster General of NIPOST then, Ismail Adebayo Adewusi.

These challenges facing Nigerian Postal Service can be partly traced to lack of attention from government, poor management systems, lack of use of modern digital technology system as well as lack of trained experts to drive the needed change.

This neglect might be responsible for why in the 2022 proposed budget of N160.593 billion, the Nigerian Communications Satellite (NIGCOMSAT) and National Identity Management Commission (NIMC) got N5.440 billion and N46.533 billion in capital votes, the ministry had N85.231 billion, while NIPOST was allocated nothing.

Other factors responsible for NIPOST poor performance are low level of investment, vast but obsolete infrastructure and facilities; dysfunctional internal system, unredeemed pension payments, untrained and poorly motivated workforce, etc. has made the agency unattractive, unreliable and unsustainable.

There has been an outcry of customers using NIPOST services to send parcels abroad that resulted in complains of lost and un-remitted parcels, which resulted in a loss of revenue, downtime and reputation on the part of the agency.

In a developed nation the agency will be slammed with heavy compensation charges and sometimes might result in total shut down. Nigerian Postal Service needs to urgently build back its lost credibility and reputation from customers.

To also make Nigerian Postal Service to perform better it needs to introduce well robust insurance scheme where mails can be insured against risks such as theft, vandalism and loss in the event of any of these risks occurring. There needs to be appropriate compensation paid to customers.

Read also: NIPOST to roll-out digitised postcode to tackle Insecurity, internet fraud

It also needs to hire professionals in the areas of digital technology, business management, sales, supply chain management and logistics experts to reposition the agency to be more competitive, productive and profitable.

This is because the advent of COVID-19 pandemic opened more business opportunities for the agency as personal and consumer freight that would have been moved by travellers during trips are now routed solely via logistics and courier agents – and this looks like it has come to stay. This has made stakeholders to realise the importance of seamless urban movement of goods and service thereby increasing the e-commerce market.

Also, while the growth of e-commerce businesses has led to rising demand in managing deliveries. Therefore, providing better services will increase competition and so restructuring policies will open the market, attract new investors, birth more small and medium enterprises (SMEs) as well as make it business friendly.

Finally, the sector needs to also be given the needed attention in its areas of challenges such as infrastructural deficits, stale policies, insecurity, high corruption rate, inadequate platform to receive customers feedback, closing knowledge and skills gap, etc

Get real time updates directly on you device, subscribe now.