The Nigerian Postal Service (NIPOST) is one of the main components derailing Nigeria’s economic advancement especially in the rural areas. With operational paralysis of NIPOST, rural and urban Nigeria have been disconnected. In my village Ovim (Abia state), we built a better post office than the one in the state capital, knowing that having a local and functioning postal service would help our community. It has always been the strategy: build schools, police station, etc with your money, and hand them over to the government.
But for the Ovim post office, while it was easy to build structures and offer accommodations to NIPOST staff, running logistics was another story. Today, that post office which was commissioned by Postmaster General of Nigeria in the presence of Ovim luminaries like Admiral Kanu, General Nwachukwu, Justice Johnson, and Prof Ogbonna, is gone.
NIPOST was not out-competed by anyone and changes in communication – indeed email – was not the fatal blow. NIPOST simply gave up because Nigeria failed to reform its systems. That one company is a regulator and an operator, taxing its competitors, makes no sense in a modern market system. Operators are expected to contribute 2% of their annual revenue to NIPOST via the postal fund which does nothing of value to Nigerians. Which company can survive in a tight margin business like courier and logistics?
We are still trying to get used to STAMP Duty where you buy stamps for sending electronic money to others. These policies will not drive innovation. Simply, NIPOST does not need to function to make money!
Mr Yusuf also noted that citizens should not be compelled to patronise NIPOST irrespective of the size or weight of an item as stated in a courier regulation.
He referred to the stipulation that says: ”All courier items/articles such as Right Issues, Shares Certificates, Statement of Accounts, Cheques, Letters or Offer documents, etc weighing below 0.5kg brought to a courier/logistics service operator shall be recorded and referred to the nearest Post Office of the Nigerian Postal Service for processing and delivery.
“Failure to do so will attract payment to Nigerian Postal Service of a penalty of 90 per cent of the amount charged on the item by the erring Operator.”
He described it as an unfair provision and an infringement on the rights of citizens and in conflict with the principle of fairness.
NIPOST’s problem is not recording losses, but the fact that it is not working. Most postal systems around the world these days are strategic loss-makers. Yes, “the United States Postal Service (USPS) announced an annual loss of $8.8 billion for fiscal year 2019, more than double its annual loss for FY18. This loss, the largest on record, marks the 13th consecutive year the USPS has finished in the red.” Yet, if you examine the period when the USPS lost this amount of money, businesses actually expanded in the core domains it served. Largely, USPS losing money was not necessarily a bad thing as its functions were critical for most of those companies to thrive.
Possibly, for every $10 billion lost by the U.S. Post, it could be adding excess new $200 billion of value in the economy. For the United States, in general, that is a net positive. The USPS saw marginally revenue increase despite the match to global digitization, implying that it was powering core elements of that new redesign. Simply, Nigeria needs to decide the role NIPOST will play in our economy and that means reforming it. What we have now does not make sense.