Experts Chart Path for Postal Sector Reform
The postal communications sector has made a significant stride in its quest for affordable, reliable, quality and universal basic postal services that will meet the needs of an increasingly sophisticated end user.
Significant, no doubt because on April 4,2007, key stakeholders discussed the issues, challenges and prospects of the postal sector in Nigeria and suggested input into the formulation of a Postal Sector Policy/Strategy and Postal Reform Bill. The forum also secured the buy-in of all stakeholders and created awareness among potential investors, service providers and consumers on investment prospects.
About 150 experts attended the forum from 43 different institutions, including Nigerian Postal Services, Nigerian Communications Commission, Central Bank, Ministry of Communications and Information, World Bank, Universal Postal Union, Association of National Courier Operators, and National Information Technology Development Agency.
In all, 10 papers were presented on diverse topics.
Imperatives of Reform
In her Welcome Address delivered by Mr. Benjamin Dikki the Director of Communications and Capital Market at the Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, the Director General of BPE, provided a background to the postal sector forum. According to her, up to 2000, the postal sector was characterized by mail theft, dumping, loss and violation of postal items.
She said that the postal sector reform, coming at this time, could only add impetus to existing efforts at ushering in a competitive and liberalized postal sector with an independent regulator for the emerging postal market.
The Honourable Minister of Communications and Information Frank Nweke jr., represented by the Permanent Secretary in the Ministry, stressed the inevitability of reform, not only in the postal sector but in the economy as a whole. NIPOST in his view is a perfect example of the wasteful past. But the government is arresting the rot, inefficiency and corruption in public enterprises through sector reform.
Overview of the Postal Sector
In his presentation, the Post Master General of Nigeria traced the history of the Nigerian postal system from 1851, when the first Post Office was established in Lagos by the British Colonial Masters to date.
According to him, following the introduction of adhesive stamps in 1874, the Royal Niger Company (later UAC), which was actually administering the country then, set up its own postal system in Akassa (1887), Calabar (1891), Burutu (1897) and Lokoja (1899).
At independence in 1960, when the post was administered jointly with telecommunications as a government department, there were 176 Post Offices, 10 sub Post offices and 1,000 postal agencies in Nigeria.
The public postal operator was established by Nigerian Postal service Department (NIPOST) with its separation from the Telecommunications Department in January 1985. NIPOST later became an extra-ministerial department in the Ministry of Communications, and eventually transformed into a Government parastatal through in Decree 41 of 1992.
The Challenge of Competition
The monopoly status of NIPOST resulted in complacency and lack of attention to customer needs. The plight of the institution was further complicated by what Nethpost Consultants identified as lack of autonomy, dilapidated network, inefficiency and high losses. The bubble was soon to burst as continued inefficient services characterized by mail theft, loss, tampering combined with inappropriate resource allocation, outdated manual processes, non visionary management to create large financial deficits and a near comatose institution.
This scenario led to the gradual incursion of private operators into the market. The late 1970s and early 1980s saw the emergence of private firms offering significantly higher quality document and merchandise delivery services than the traditional services rendered by the post offices.
In 1978 the International Messengers (Nig) Limited (IMNL) now known as United Parcel Service (UPS) was established. By 1984, three additional operators (DHL 1979, IAS 1980, TNT 1984) had joined the market. As at December 2006, there were 191 registered courier companies operating in Nigeria not to mention several others still operating illegally.
Thrust of Postal Reform
According to Nethpost Consultants, the objective of Postal Reform is to create a postal sector that will provide low cost universal postal services, safe and efficient postal services.
Both the UPU representative and Director, Communications and Capital Markets (BPE) in their presentations, supported the reform thrust as presented by Nethpost Consultants. According to them, the major challenges in the design of a Postal Sector Policy are the absence of postal sector policy, the legal framework is unable to regulate competition properly and does not protect universal services/access; there is no independent regulatory agency and the public operator itself (NIPOST) lacks autonomy, and has dilapidated network.
To address theses challenges, the Postal Sector Policy will address market-oriented legal/regulatory Limited Liability Company in the short term. In the long term the policy will emphasize creating a viable postal company as well as postal services.
Legal and Regulatory Imperatives
Regarding an appropriate legal and regulatory framework for the postal sector, Mr. Kemi Pinheiro (SAN), a postal legal expert, presented the likely thrust of the Postal sector Bill. He reviewed the postal sector laws for the Royal charter granted by the Queen of England to UAC in 1879, through the Creation of Post Office under the 1928 Ordinance Cap.156 LFN 1958 with enormous powers to Governor General in Council and Director of post and telegraphs to Decree 41 of 1992.
Pinheiro, SAN, noted that Decree 41 of 1992, which is the legislative basis of postal service delivery in Nigeria, is 15 years old, archaic, outdated and incapable of meeting global trends and development in the postal sector.
Pinheiro identified issues that need to be addressed by the new sector policy. The first is the separation of NIPOST as a Universal Postal Service provider from being a postal regulator. Second, creation of an "Independent" regulatory body by statute to regulate and control the new and reformed postal sector whose primary responsibility is the creation of a channel for universal access to postal service. Third, the establishment of a distinct regulatory authority to oversee the activities of the postal sector and is devoid of the influence of the Federal Government.
Postal Communication in Financial Intermediation
The role of postal communication in financial mediation was highlighted in the paper presented by the Director, Strategy & Performance, at the CBN. In his view, postal networks, by virtue of their widespread physical coverage, even in rural areas which the formal financial sector usually does not directly reach, positions it well to provide grass-root financial services.
Possible and potential financial products a re-engineered NIPOST can offer include Payments System Services, comprising money order, Pension disbursement, Electronic Bill Presentment and Payment (EBPP) utility, Payroll administration, Automated Teller Machine, Electronic Funds Transfer at Point of Service (EFT POS), and Postal giro accounts. NIPOST can also offer products on credit, insurance, international remittances, savings mobilization, data transmission and tax and fee collection ICT as Catalyst for Postal Service Delivery
In his contribution, Dr. A. S. Daura, Director, Technical Services, National Information Technology Development Agency (NITDA) described the postal system before the advent of the ICT revolution as largely inefficient, laborious and slow (derisively referred to as "snail mail").
The Director identified the two major roles of ICT in Postal Services as an enhancer of traditional roles of the post, and as a precursor to new opportunities. In his view, ICT enhances the traditional roles of postal communication through increases in the accessibility of the postal networks, the reach of the postal networks, and the effectiveness of the postal networks.
Investors' Perspective
The courier operators also presented their expectations from the postal sector reform. The operators, whose views were expressed by the Vice President, Association of Nigeria Couriers Operators (ANCO), advocated the Inauguration of Effective Board of Directors whose membership will include public officers and private stakeholders.
The functions of the board would include setting of policy procedure and postal rates for services recorded, appointment of PMG/CEO who oversees the day to day activities of service, and appointment of a Deputy Post Master General who operates as the Chief Operations Officer.
On operational and procedural issues, ANCO supports the devolution of postal services to private operators such as private, small-time couriers who operate with bicycles, motorcycles, minivans for the delivery of time sensitive documents and packages, developing a business relationship with private organisations to develop postal activities.
•Ndubisi is Project Manager (Postal Communications) in BPE
