The Nigerian Postal Service (NIPOST) plays a crucial role in the nation's commerce and communication. However, it faces significant challenges that hinder its effectiveness. This article examines the issues plaguing NIPOST, its importance to Nigeria's economy, and potential reforms based on global standards and local realities.
The Problem: NIPOST Does Not Work
Simply put, NIPOST does not work efficiently. When Nigerians need to send parcels, NIPOST is often not the first choice. Instead, people prefer formal and informal private delivery services. Private logistics companies and even informal networks through motor parks are more commonly used.
Anecdotal evidence abounds on social media, with stories of customers searching for their own parcels in post offices or waiting months for deliveries. This indicates that NIPOST suffers from inefficiency and unreliability.
The inability to move goods easily, reliably, and affordably stifles commerce and economic growth.
The Global Framework: Integrated Index for Postal Development (2IPD)
Globally, postal services are measured using the Integrated Index for Postal Development (2IPD), developed by the Universal Postal Union (UPU). The 2IPD score reflects the performance of a country's postal service based on four key pillars:
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- Reliability: Speed and efficiency of service
- Reach: Connectivity to the rest of the world
- Relevance: Success of various postal methods and activities
- Resilience: Ability to respond to economic, social, technological, and environmental shocks
A higher score indicates a better postal service. In 2023, Nigeria's 2IPD score was 35.12%. Countries with higher scores include Russia, Ethiopia, Türkiye, and Switzerland, while those with lower scores include Iraq, Argentina, South Africa, and Iceland.
The Numbers: Market Dominance and Economic Impact
Strong postal services dominate their local markets by excelling in the 4 Rs of reliability, reach, relevance and resilience. For instance, in the USA (2IPD score of 86.4%), the US Postal Service accounts for 32% of all non-letter packages sent in the country.
The 2023 State of the Postal Sector report indicates a significant causal relationship between higher postal development scores and stronger economic resilience. Without postal infrastructure, a country’s annual GDP could reduce by a median of 6.96%. Strong postal services can contribute between 0.5% to 1.0% to a country’s annual GDP.
For Nigeria, this translates to up to $2.57 billion left on the table due to the underperformance of NIPOST.
Why is a Strong NIPOST Important?
There is no commerce without movement of goods. As described in the 2023 State of the Postal Sector report, “there is a significant causal relationship between higher postal development scores and stronger economic resilience.” In fact, the report shows that in the absence of postal infrastructure, a country’s annual GDP would reduce by a median of 6.96%. Since there’s no country completely void of a postal service, studies show that strong postal services directly contribute between 0.5% to 1.0% to a country’s annual GDP. In Nigeria, that’s up to $2.57 billion left on the table.
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The Guiding Questions: Improving NIPOST Systematically
Using the 2IPD framework, the following questions can guide the systematic improvement of NIPOST:
Priority 1: Reliability
The goal: to get packages to their destinations safely and reliably, in a predetermined amount of time or earlier; ideally within 3 business days in the same state, 4-5 business days in the same region, and 7-10 business days in the most remote parts of the country.
- Lead question: Who is currently a reliable mover of people or things in the country? How do they do it?
- Is it possible to build an efficient and reliable postal service without owning all the assets?
Priority 2: Wide-spread domestic and international reach
The goal: to get packages to any destination within the geographical boundaries of Nigeria, no matter how remote, and most places in the world.
- Lead question: Which products are currently distributed to every part of the country, including the most remote and disconnected villages, and how do they distribute? What lessons can we learn from the distribution of Coca-Cola, petrol, ballot boxes, cellphone recharge cards and textiles?
Nigeria’s geographical mass is pretty diverse with mountains, rivers and places with poor road networks. However, there are no two remote portions of the country that cannot be reached within 7-10 working days by road. Once zones are established, clear expectations can be set with customers.
Priority 3: Relevance
- Lead question: How can NIPOST offer crucial complimentary services such as retail supplies and mobile money, to increase revenue and increase the chances of patronage?
Priority 4: Resilience
The goal: to leverage the social, economic, environmental and technological realities of the day, and grow to withstand them.
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- Lead question: How can NIPOST work with the reality of Nigeria, not against it? How has Coca Cola managed to distribute and trace product? Is there something to learn from our efficient money transfer system?
- What’s the average delivery speed, distance, cost and weight of posts in 2024, compared to 2019 (an important marker for pre/post COVID-19), 2014, 2009, 1999, 1989 and 1987 at inception. Which metrics are improving and which ones are declining?
These questions are crucial for understanding the underlying challenges and working on lasting reforms.
The History of NIPOST
The history of the Post in Nigeria dates back to 19th century. The first post office was established by the British Colonial Masters in 1852. It was considered to be a part of the British postal system. It was a branch of London General Post Office and this was the situation till 1874. In 1898, the British Post Office established post offices at Badagary, Epe, Ikorodu, Ijebu-Ode, Ibadan and Abeokuta.
In 1892, the Royal Niger Company became a member of the Universal Postal Union. From January 1, 1900, the Southern Nigeria Government took over the responsibility of running the postal system in the entire country. The first post-office in Northern Nigeria was established and located at Lokoja in 1899. At independence, the post was administered jointly with Telecommunications as a government department.
Later, postal establishments and services grew in leaps and bounds. The Federal Government by Decree No. 22 of 1966 made the department a quasi-commercial organisation a step towards making it more efficient and responsive to public needs.
Through the promulgation of decree No., The Nigeria Postal service Department came into being with the establishment of the Nigeria Telecommunications Limited (NITEL) on January 1, 1985.
NIPOST is 100% owned by the Federal Government of Nigeria and is supervised by the Federal Ministry of Communications. It also regulates courier companies within the country. It was established as a department in the Ministry on 1st January 1995 by the virtue of Decree No. To represent Nigeria in its relations with other postal administrations and other bodies concerned with postal services.
FG is Committed To Improving NIPOST Operations - Minister
Challenges and Privatization Efforts
NIPOST faces several technical, financial, and operational problems that have prevented it from providing its core services. The operational structure of NIPOST is obsolete, as a result, of which its services are very poor, thus leading to explicit customer dissatisfaction.
NIPOST depends solely on the Federal Government for its capital funding requirements as well as part of its personnel cost. The subvention from government is based solely on budgetary allocations that have little or no bearing on NIPOST’s financial needs, both recurrent and capital. Due to its legal status, NIPOST at the moment has no power to source funds from the capital market.
There have been several attempts to reform the service including a stalled unbundling of NIPOST following a 2018 analysis by KMPG.
NIPOST will be privatized in three phases. Phase I is essentially the diagnostic review and determination of strategic options for NIPOST privatisation and the postal sector in Nigeria. Phase II will focus on restructuring NIPOST into various business units. There is currently no sector policy.
NIPOST maintains the following facilities for its operation: 32 territorial head offices, 4,559 postal establishments as at December 2002.
A re-engineered NIPOST, given its vast network and infrastructure all over the country and its experienced human resources through skills acquired over the decades, is a major cash spinner for a very entrepreneurial investor.
Table: NIPOST Key Operational Data (as of December 2002)
| Item | Value |
|---|---|
| Territorial Head Offices | 32 |
| Postal Establishments | 4,559 |
