On-going Transactions

NIGERIAN POSTAL SERVICES (NIPOST)

LOCATION

NIPOST Headquarters
Muhammadu Buhari Way,
Area 11, Garki, Abuja.

 SERVICE OFFERINGS

 NIPOST currently operates 7 Commercial Business Units (CBUs): Mail, Counters, Financial Services, EMS/Parcel, E-commerce and Logistics, Nigerian Postal Institute and Workshop and Properties, which provide the following services: Post office box/private mail bags, postage stamp, international mail (inbound/outbound), bulk post/hybrid mail, direct mail/advertising mail, international reply coupon, pick-up services, agency services and philatelic services, agency Banking for DMBs, MFBs, NBFIs &  outlets for mobile money operators, Speedpost, EMS documents, EMS Merchandise, parcel, online trading of products & services, educational services, Property development/investment etc.

OWNERSHIP STRUCTURE

 NIPOST is 100% owned by the Federal Government of Nigeria and is supervised by the Federal Ministry of Communications.  It was established on 1st January, 1985, through the promulgation of decree No. 18 of 1987, hence NIPOST became an Extra-Ministerial Department.

MODE OF PRIVATISATION

The Public Enterprises (Privatisation and Commercialisation) Act, 1999 under Second Schedule, Section 6 (1), Part 1 listed the Nigerian Postal Services (NIPOST) as one of the twenty-four (24) government enterprises slated to undergo partial commercialization by the Federal Government.

On the 31st of October, 2017, the National Council on Privatisation (NCP) approved the Postal Sector Reform, Restructuring & Modernisation of NIPOST, and the setting up of a Steering Committee and Project Delivery Team to drive the process. In 2018, a Consortium led by Messrs. KPMG were engaged to provide Transactions Advisory services towards a successful reform programme.

 SECTOR DATA

THE MACRO-ENVIRONMENT

  • NIPOST maintains about 1,394 Post offices, 13 Workshops and 2 Training Institutes across Nigeria.
  • NIPOST performs dual functions as an operator and regulator of courier companies.
  • Key provisions of the Postal Sector Policy have been incorporated in the harmonized Information and Communication Technology (ICT) Policy which was produced by the Federal Ministry of Communications Technology and has been approved by the Federal Executive Council (FEC).

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 as presently constituted is an unwieldy business concern. Its operation are cumbersome, administratively weak and lacking in strategic business focus. Some management theorists advise that large corporations with multi-product lines break into subsidiaries for better efficiency, while leveraging on shared support resources. This appears to be the case for NIPOST. The centralised Management structure has ensured that management’s strategic objectives are lost in the maze, while monitoring and evaluation is poor.

An unbundled NIPOST would be better focused and result-oriented. The transaction envisages the creation of six non-core postal companies to operate alongside the core postal business of NIPOST:

  • Transport and Logistics Company
  • Property and Development Company
  • Financial and Digital Services Company
  • E-Commerce Company
  • Microfinance Bank
  • E-Government Services

NIPOST BOARD

The NIPOST Act provides for a Governing Board known as the Nigerian Postal Service Governing Board. On the 7th of March 2018, the board was inaugurated and commenced sitting. The Board consists of a chairman to be appointed by the President, the Permanent Secretary of the Ministry, a representative each of the Federal Ministries of Finance & Internal Affairs, the Managing Director of the Nigerian Telecommunications Limited, the Postmaster-General; and two persons who in the opinion of the President have by reason of their business or professional attainments, special contribution to make to the work of the Postal Service.

MANAGEMENT

NIPOST has a three-tier structure consisting of Corporate Headquarters, 7 Zonal Administrations and 108 Districts.

The Postmaster-General is the Chief Executive Officer, and is assisted by 4 Directors (Director of Human Resources, Director Finance & Investment, Director of Strategy & Business Development and Chief Operating Officer) and 7 General Managers of the Strategic Business Units.

While, the affairs of the Zones are overseen by Zonal Managers; District Managers oversee the affairs of the Postal Districts.

CURRENT FINANCIAL PERFORMANCE

 NIPOST depends solely on the Federal Government for its capital funding requirements as well as its personnel cost. In 2017, NIPOST generated about N6.9 billion, in the same year, Federal Government injected N7.2 billion as grant to NIPOST, despite revenue generated. Due to its legal status, NIPOST at the moment has no power to source funds from the capital market.

POSTAL SECTOR REFORM, RESTRUCTURING & MODERNISATION OF NIPOST                     

OBJECTIVES OF THE REFORM

 The objectives of the reform programme include:

  • Establish a low cost postal service that provides a solid communication medium and link nationwide;
  • Provide a safe and efficient postal service that is sustainable and keeps pace with development in the rest of the world;
  • Introduce private sector participation and the development of the postal service into a commercially viable enterprise; and
  • Create a convenient means of savings, mobilisation and payment/funds transfer system for the entire country through the postal network. 

PROSPECTS FOR A MODERNISED NIPOST

NIPOST as presently constituted is an unwieldy business concern. Its operation are cumbersome, administratively weak and lacking in strategic business focus. Some management theorists advise that large corporations with multi-product lines break into subsidiaries for better efficiency, while leveraging on shared support resources. This appears to be the case for NIPOST. The centralised Management structure has ensured that management’s strategic objectives are lost in the maze, while monitoring and evaluation is poor.

Consequently, the Bureau suggests that an unbundled NIPOST would be better focused and result-oriented. The transaction envisages the creation of six non-core postal companies to operate alongside the core postal business of NIPOST:

  • Transport and Logistics Company
  • Property and Development Company
  • Financial and Digital Services Company
  • E-Commerce Company
  • Microfinance Bank
  • E-Government Services