BPE
January 8, 2006
Nigeria Postal Service (NIPOST)
LOCATION
NIPOST Headquarters
Muhammadu Buhari Way,
Area 11, Garki, Abuja
SERVICES OFFERINGS
NIPOST provides a wide range of services and products classified into mail services, counter services & retailing, and workshop services. It also regulates courier companies within the company. These services are as follows:
- Developing and promoting postal services
- Collecting, sorting and delivering mails nationwide
- Counter services and retailing
- Workshop services
OWNERSHIP STRUCTURE
NIPOST is 100% owned by the Federal Government of Nigeria and is supervised by the Federal Ministry of Communications. It was established as a department in the Ministry on 1st January 1995 by the virtue of Decree No. 18 of 1987. However, it became an autonomous entity on 1st July 1992.
MODE OF PRIVATISATION
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. Phase III will be the actual privatisation of the entities created from the restructured NIPOST.
SECTOR DATA
THE MACRO-ENVIRONMENT
- The Ministry of Communications, which has the statutory function of supervising the postal sector, has through incorporating NIPOST given it a status of a National Postal Service provider for Nation.
- NIPOST maintains about 4,168 postal service centres and 32 territorial head offices throughout the federation.
- Ministry of Communications regulates operations of NIPOST, whilst NIPOST regulates the courier companies
- There is currently no sector policy. This would put in place before the end of NIPOST privatisation.
THE MARKET ENVIRONMENT
In the provision of traditional regular mail services (conventional mails, mail deliveries, counter services and retailing), NIPOST has a 100% share in this segment of the industry. It, however, faces stiff competition in the courier services segment from other players such as DHL, Fedex Redstar, UPS, Fenway, TNT, etc.
THE BUSINESS OPPORTUNITY
NIPOST maintains the following facilities for its operation: 32 territorial head offices, 4,559 postal establishments as at December 2002. There are 1,004 landed properties with 948 fully developed and 706 transportation fleet.
The future prospects for NIPOST are:
- Sole provider of regular mail services/High potential of the postal market
- Opportunity for expanding courier services
- Potential for future expansion/growth
- Landed properties
THE PERFORMANCE OF THE ENTERPRISE
NIPOST has 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. Constraints faced by NIPOST in its operation include bureaucracy, complacency, insolvency and technological obsolescence, and inadequacy of operational vehicle.
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 NIPOSTâs 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. Government investment in NIPOST is therefore in terms of fixed assets.
NIPOST Schedule of Mails (1998 â 2002)
| 1998 | 1999 | 2000 | 2001 | 2002 | |
| Mails posted in Nigeria | 120,000,000 | 45,862,274 | 43,209,789 | 30,808,292 | 43,064,121 |
| Mails received from abroad | 190,300,000 | 73,378,038 | 64,106,535 | 19,775,149 | 25,293,030 |
| Total mails handled | 310,300,000 | 119,239,312 | 107,316,324 | 50,583,441 | 68,357,151 |
Source: NIPOST Annual Report 1998 â 2002.
NIPOST had a total of 13, 707 staff as at December 2002.
PROFIT AND LOSS ACCOUNT
NIPOST Profit and Loss Account. (1998 â 2002)
| 1998 (N) | 1999 (N) | 2000 (N) | 2001(N) | 2002 (N) | |
| Revenue | 913,890,973.79 | 1,103,520,162.78 | 1,102,001,414.00 | 1,806,558,931.93 | 2,168,599,929.30 |
| Profit (Loss) | (1,349,984,106.) | (1,003,686,088). | (2,116,018,567) | (2,725,300,529) | (2,502,750,394. |
PROSPECTS
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. It is expected that the right investor can easily turn NIPOST around to maximize the utilisation of many of its dormant resources to enhance the efficiency of its operations.