Questions to help reform the Nigerian Postal Service (NIPOST) once and for all.

A reform of NIPOST could significantly improve the productivity of Nigerian businesses but this service has been notoriously hard to overhaul. Why? Could we fix that?

This essay asks insightful questions about NIPOST and provides a framework to address the issues that have plagued the service for a long time. In asking some of these questions, I present a magnifying glass into what’s happening with postal services around the world and propose a much-needed reform of NIPOST.

Source: Guardian NG via Premium Times

What’s the problem?

NIPOST does not work. The problem is that simple. By anecdote, we know that when people have to send parcels, NIPOST is not top of mind. Instead, people favor both formal and informal private delivery services. Formally, private logistic services like GIG Logistics, Gokada and small delivery companies are the go-to for many Nigerians. Informally, it is impossible for us to track how many people walk up to motor parks in once city, give a driver their parcel, give him the number of the recipient, and have the recipient pick it up from the motor park in the destination city. We do not know the numbers for this but we know the numbers are high because we’ve all done it. A quick search of NIPOST on X is full of curious stories about how people went to a post office and rummaged through to find their own parcel, or how they are still waiting for a package 6 months later. So NIPOST is not top of mind, is not efficient, is not reliable and therefore, does not work. If people cannot move things easily, reliably and affordably and to any destination, commerce is stifled.

My experience with logistics in Nigeria has become a do or die affair. In many ways, my customer experience is valuable because I know how NIPOST serves (or disserves) me now, I know how I would like it to serve me, and I have done some work to figure out how other services around the world have hacked theirs. On a professional level, my experience moving people (hospitality and tourism) and things (games and puzzles) around the country and the world has allowed me to see into the logistics space in a way that’s as fascinating as it is frustrating. I also understand the context that NIPOST operates in and can look at things without the idealistic perspective that researchers from external contexts often use to view Nigeria. At the very least, I am hoping someone takes some of my questions to heart. I just want something good to come out of sleepless agonizing nights because of a broken logistics system. If anyone at NIPOST sees this, please reach out to me if you would like more of my research that did not make this essay.

Swiss Post has a 100% 2IPD score…the best in the world.

The global framework.

Globally, there is a well laid out index for measuring Postal Development. Every country has an Integrated Index for Postal Development (2IPD) score developed by the Universal Postal Union (UPU). The higher your score out of 100, the better your postal service. The 2IPD collects big data from many indicators and billions of records to develop a score that measures four Rs: reliability, reach, relevance and resilience. Reliability measures the speed and efficiency of service, reach measures connectivity to the rest of the world, relevance measures the success of various postal methods and activities, and resilience measures the ability to respond to economic, social, technology and environmental shocks.

Right now, Nigeria’s 2023 2IPD score is 35.12%.

Some countries with a lower score than us are Iraq, Argentina, South Africa and Iceland. Some countries with a higher score than us are Russia, Ethiopia, Türkiye and Switzerland.

The numbers.

The strongest postal services in the world dominate their local markets. They dominate over private logistics services because they excel at the 4 Rs of reliability, reach, relevance and resilience. In the USA (2IPD score of 86.4%), the US Postal Service accounts for 32% of all non-letter packages sent in the country with the rest accounted for by Amazon (27%), UPS (21%), FedEx (17%) and Others (3%). Switzerland has a perfect 2IPD score of 100%. Right now, Nigeria’s 2023 2IPD score is 35.12 out of 100 which is a poor measure of any of the 4 Rs above.

While we do not have reliable data of how much mail was posted by private logistics services in Nigeria, we have some data from NIPOST and can make some inferences. In 2021, about half of all mail handled by NIPOST came from abroad. This is because any parcel that’s coming in from another country’s postal service will pass through NIPOST, as opposed to courier services (FedEx, UPS, etc.) that handle their own delivery supply chain. So if you post something from the USA via the US Postal Service, when it gets to Nigeria, it is usually handled by NIPOST. This means only half of NIPOST mail is being sent from Nigeria to Nigeria and from Nigeria to other countries…a clearer picture of how Nigerians in Nigeria, doing business in Nigeria, experience and patronize NIPOST. Some of the volume that could be going to NIPOST is being handled by the formal and informal private logistics services I mentioned above. The key to remediating NIPOST will be to fix domestic and outbound postal services.

Why is a strong NIPOST important?

The 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.

There have been several attempts to reform the service including a stalled unbundling of NIPOST following a 2018 analysis by KMPG. The reform that will stand the test of time will be functional, not fancy. A crucial first step is to work with the current realities, rather than try to innovate in a direction that falls flat in a few years.

The guiding questions.

There is some data available for NIPOST but there is still a gap in what’s available. For instance, we know a lot about the US Postal Service (USPS) and their counterparts in China, Britain, most EU countries and Australia. So, we can see whether people are sending more packages or fewer, if they are sending more slow mail than fast mail, and how much the services earn. Most importantly, there are trends and forecasts that show the relationship between postal volume and income levels, conflict, COVID-19 and policies. Using the 2IPD as a framework, the following questions could guide us towards improving NIPOST systematically in a way that is sustainable. As a reminder, the 4 points of focus are reliability, reach, relevance and resilience.

Priority 1: Reliability (measures efficiency, predictability and service performance)

• 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? If these won’t work, are there working systems in other contexts/countries that will be applicable to Nigeria’s unique context?

It is crucial to stay asset-light. NIPOST may not need to buy all their own trucks and bikes. Is it possible to build an efficient and reliable postal service without owning all the assets? Could the lead question above help NIPOST figure out a supply chain through private partnerships?

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.

Map showing different USPS zones for a customer who is located in Los Angeles (blue). As the map colors get warmer, the delivery time increases. Source: USPS.

Priority 3: Relevance - the demand for all services including mail, logistics and financial services.

• The goal: to offer a variety of services and activities including mail, logistics, financial services and retail supplies.

  • 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 capacity to overcome economic, social, technology and environmental shocks.

• The goal: to leverage the social, economic, environmental and technological realities of the day, and grow to withstand them.

  • 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?

    • If there’s a flood or power outage, what will happen to postal services?

There are no easy answers. Yet, these are important questions to seek answers to, in order for us to understand the underlying challenges and work on lasting reforms.

Have you spent any time thinking through the issues that NIPOST faces? Let me know your thoughts; I’d love to hear them. Also, if anyone at NIPOST sees this and would like to discuss some more of my research, please reach out to me by simply replying this post.

Love,

F.