Mr. Bisi Adegbuyi, a lawyer and a professional politicians, now the Post Master General of the Nigeria Postal Service (NIPOST) recently granted eBusiness Life Magazine, an interview that bared the plans, prospects and challenges of the organization. NIPOST, while waiting for the passage of the Postal Reform Bill, has set already set plans to success and profitability in its social services. Mr. Adegbuyi throws more light.
What is the current state of NIPOST
What remains to be done is that partial commercialization of NIPOST, which is out of my purview because it involves the Presidency, the National Council of Privatisation, and all others. And then, passage of the Postal Reform Bill in the National Assembly, again this is outside my purview. But in terms of restructuring for operational readiness, modernisation, transformation, all geared towards professional efficiency, we have done that and we are doing that.
When the Postal Administration decided to restructure its activities, its product, and therefore created six commercial business groups, and financial services was just one out of the six commercial business units. Under the financial services architecture, you have Agency Banking, Remittances, Mobile Money, and others. And based on the United Nations Sustainable Development Goals, we have the Financial Inclusion Initiative. And in line with our determination to occupy the driver’s seat in the financial service journey, we have come up with new innovative and game-changing products that are aimed at deepening financial service. One of such is the Electronic Money Order, which by the admission of the Universal Postal Union, is unique and novel. For us it may not be novel, because The Post from time immemorial had been involved in money transfer based on what we called Money Order of old, but because of the disruptive nature of technology – I remember when I was in the secondary school, any time anyone had a registered letter, it meant that there was a Money Order sent to him, to be redeemed at the post office – Now, because technology, disruptive as it may be, although offering unbelievable opportunity for a smart postal administration. We have decided to leverage on technology to create what we call Domestic Electronic Money Order. This means that money can be transferred locally, from any part of the country using the wide network of the Post Office, although electronically.
One of the major issues confronting countries all over the world is poor addressing system. 70-75 percent of the world is buffeted by addressing challenges, so it is not peculiar to Nigeria. And we have vision and mission and determination to change the trajectory of the post. We have commissioned Nigerian experts, young men and women, to come up with a solution for digital addressing system. We are not unmindful of the fact that in spite of the challenges aforementioned, we still have some addressed that we used to deliver mails, packages, packet and all of that. So there’s a responsibility for us to ensure that no matter how insignificant that percentage is, those addresses must be verified. And then we came up again with an innovative product that is called NIPOST Address Verification System. As a postal administration, NIPOST is determined to leverage on evolving technologies in order to compete favourably with other postal administrations in the world and subscribe to what we call global best practice.
When I became the Post Master General, coming from the background of the private sector and a politician, I thought there will be a need for me to use the post to create wealth and reduce poverty. I never knew that was the intention of the financial inclusion, but I just thought that I set this mandate for myself, and I began to think of how to actualize same. And that got us into thinking that through this Address Verification System, we can leverage on ICT and create e-Employment. So we entered for a project sponsored by agencies of the United Nations, International Telecommunications Union and World Summit on Information Society, in the category of leveraging ICT to creating employment. And we won the price on March 21, 2018.
With this initiative, we will engage the services of unemployed men and women, boys and girls, who have ordinary smartphones, who will become our Address Verification Agents by using their smartphones to verify addresses, including live photos, and using our App it will be uploaded to our database. And each person will earn between N100, and N150 per address verified.
Again the Central Bank of Nigeria has awarded NIPOST the International Money Transfer Operator License, which means NIPOST can now play in the remittances ecosystem, where the World Bank reported that 2017, Nigerian migrant workers in diaspora remitted a whopping $22 billion to Nigeria. At what cost? 9.5 percent. Which is high in our opinion. One, this is because the Post is not involved. Two, the reach – when people send money, our migrant workers from all over the world, they use Money Gram, Western Union, as the case may be, which are limited to where the banks have presence. But the truth is that these remittances are mainly meant for the rural poor. And that’s why we need to get the Post to be involved so that not only that we will bring down the cost of transaction, but we can also increase the reach. Any beneficiary in the rural area wouldn’t go to the urban or semi-urban area to go and collect his money. He could go to any nearby Post Office, cash in and cash out, wallet or open an account there.
We are just starting, and we are taking it one step at a time. Ideas can be encapsulated or put in a book, but the implementation and the operational readiness of such ideas is what is important.
So, in the next few weeks, we will go live with our remittances, we will go live with our Domestic Money Order, we are also going live with the integration of the big e-Commerce giants into our shipping API where we can do deliveries for them. Don’t forget that the major challenges of shipping companies in Nigeria is cost. They spend about 30 percent of their revenue on cost. And if we can assist in delivery and reduce that to maybe 10 or 15 percent, that will be good news for them, and good news for NIPOST, a win-win.
How will the youth benefit from the restructuring of NIPOST, especially in the area of employment?
Because we have not formally launched this initiative, we are training our people, the technology is ready, but we also know that the deluge of Nigerian youths, unemployed people, wanting and wishing to be our Address verification Agents, will be much, so we need to put our house in order, we need to do our homework well. We have figured it out, it is workable. Our intention is that each Verification Agent will be able to make more money than an Uber driver.
We need to get the stakeholders to buy into it – the Central Bank of Nigeria, the Nigerian Communications Commission, various financial institutions, Federal Road Safety Corp, National Identity Management Commission, and a host of others, simply because they are interrelated and interwoven. Under the KYC, Know Your Customers, the statutory responsibility of banks and financial institutions is that they are supposed to know where their customers reside. They should verify their address. But you and I know what the position is now. And the identity we are talking about, identity will be meaningless without tying it to a specific address. So we have also developed a solution that will assist us, or we can leverage, in not only verifying addresses, but we will also be verifying identity. We are leveraging on evolving technology in order to render services to Nigerian people.
Is there a timeframe for these projects?
The truth of the matter is that we are going live with some banks in the next few weeks. But the issue of getting stakeholders to buy into it is not something I can be magisterial about, I can’t take decisions. But the people who have voluntarily bought into it – Eco Bank, Keystone Bank and one or two other banks that we are in partnership with, regarding Agency Banking. And the truth of the matter is that most financial institutions are asking us to verify address for them. But what will open up the floodgate, when the Digital Addressing System is ready, the prototype will be ready in another one or two months, wherein you will just download our App on your smartphone, and wherever you are, a digital address will be given to you. We have succeeded in dividing Nigeria into 330 billion 3 X 3 meters space. Which means even inside the water there will be addresses. The Digital Addressing System encompasses States, Local Governments, Post Code and unique identifier – three or four numbers. However, we need to streamline it, so that people won’t embark on indiscriminate claiming of addresses. We may have to ask an individual to first pay for the verification of the address, a token. Once you pay that token, the address automatically becomes yours. In order not to put the cart before the horse, the existing address, 10 to 15 percent we will continue to verify them as we have requests and offers from necessary stakeholders. But it is the primary responsibility of the government of the Federal Republic of Nigeria to give addresses to its citizens. Not only that, it is a massive national infrastructure. It is a bridge between government services and the citizens. And these are some of the things that we believe that in the next two to three months we will come up with.
With the Stamp Duty imbroglio, it is obvious that sensitizing consumers are key to the success of the projects NIPOST will undertake. How well are you carrying the consumers along?
Speaking to the consumer is a function of when you are ready when you go live, you do piloting, so that where you have challenges you correct them before speaking to the consumers. Otherwise, you will be putting the cart before the horse when you have not perfected your act. I know the importance of media advocacy, and there are some laws that we also need to get past. Don’t forget that when you talk about technology, our laws are obsolete. We don’t have laws for some of these technologies, for example, before electronically-generated bank statements became admissible in the court of law of Nigeria, Nigeria Evidence Act had to be amended. By the way, I am a lawyer, I’ve been one for 31 years. Now, electronic stamps, which is also an innovation. I am aware you are aware of the controversy surrounding touching and concerning stamp duties. For the purpose of this discussion and to put issues in proper perspective, what we collect is stamp proceeds, we don’t collect duties; we are not a tax collection agency. So, we also need to amend the Stamp Duties Act in order for you to be able to deploy your solutions for electronic stamps, which will automatically dispense electronic stamps when people do transactions online or Point of Sales. You know e-Commerce is big, and Nigeria is the biggest e-Commerce market in Africa. These are the areas where NIPOST is set to make money and positioned to make money.
How will you facilitate technology drivers and data hosting?
That’s why Galaxy Backbone is there. And that’s why we have private organisations – Rack Center, MainOne, and others. We have not started the collection, but naturally a sister organization/parastatal is Galaxy Backbone. We have also been advocating Agency collaboration and have we call shared services as opposed to operating in silos. It doesn’t make economic sense for NIPOST to embark on capital expenditure on having its own data centre, when you have a sister agency that has it and you can just rent space wherever they have it.
When we say technology not defined, we are simply talking about internet penetration. Wherever you have any of the mobile network operators working, you can carry out a domestic money order. It doesn’t need too much data, because you are not downloading heavy pictures. Wherever you have mobile telephony, you can carry out some of these innovations.
The starting point is for great facilities. As a businessman you are going to invest in areas where you will make money from. But we also have what we call Universal Service Obligations because whether you like it or not, post matters remain social services, especially those basic ones. Your guess is as good as mine, the financial state of NIPOST. We don’t take subvention from the federal government, but the government pays the salaries of the staff, so in a way that’s subvention. Again, we carry out postal businesses where they are not commercially viable. That’s what we call Universal Service Obligation, which is more or less, subsidy. If you don’t have the money, you need, first of all, to think outside the box and introduce new innovative game-changing products that will bring money. And that’s what I’ve done. NIPOST of the old was a mono-product organization, just mail and EMS. And you need to upgrade the facilities in the urban areas where they are making money before you start thinking of the rural areas. And Nigeria is a massive country, so you must do these things in phases. If you start it all over Nigeria, that is a recipe for failure. And my business orientation and experience will not allow me to do that. It doesn’t even make any economic sense. Therefore, naturally we know we have to upgrade facilities, but we must stagger it, it will be in phases.
With the passage of the Postal Reform Bill, it is obvious that NIPOST government may drastically reduce subvention to the organization. If that happens, how will NIPOST manage money generation?
There are various ways of making money. For instance, the Address Verification System, we are going to make money from it. If our projections are on point, we will make more money than we have been making on EMS, which is our cash cow. Millions of addresses to be verified. It is the social responsibility of those that want addresses to be verified to pay for it. Banks will pay, Telcos will pay. Telcos must verify the addresses of their customers when you are giving them new SIM cards. Electronic Money Order, we will earn money from it. Electronic Stamp, which people erroneously and controversially refer to as Stamp Duties, is a money spinner. We will have a percentage of that because there’s a cost for us for printing stamps manually, and there’s a cost for technology or deploying electronic stamps. e-Commerce, when you do delivery for people, you are going to earn money. Becoming a multi-product organization will necessarily create new income streams and avenues, so we will have money to upgrade our facilities.
The e-Government services will come in ideally when we give people addresses, when we are able to also authenticate and verify the addresses. Before you render services to somebody, first and foremost you should know if he is a Nigerian; secondly, you must know where he/she stays. That, in terms of priority. In equity, we say a man must be presumed to be just before being generous. We need to get this organization going, and making a profit, and then assist the government in making services available to the people. One of such areas of again is the National Cash Transfer Scheme of the federal government, which is more or less a safety net for the vulnerable and the weak in the society. We are the experts and we are better placed for what we call Last Mile Financial Services Delivery because the people you are going to give the money to are scattered in the rural areas where the banks are not there, where the agents that want to distribute these monies don’t have a presence in, but we have a presence all over the place. We have been engaged, we will soon be engaged to be part of the distribution of the money. People who won the bid, expectedly to transfer the money, are also coming to us because we have a solution that is called Bulk Payment Solution. Our GPOs all over Nigeria have strong safes if you want to pay cash, but we are actually discouraging that because of the Cashless Policy of the government. That’s why you can terminate some of these monies into Wallets, into Money Order. And we are also talking to some of these card producing companies into producing cards for our people. And the icing on the cake, as corroborated by the President of Nigeria when he went for the Commonwealth Heads of government meeting, 60-65 percent of the population of Nigeria consists of youths, transiting to 70 -80 million people. These people don’t patronize the Post, because we don’t give them products that will excite them. So, we have to come up with what we call Post YES – Post Youth Engagement Strategy, which will make Post Office attractive to the youth, increase traffic to the Post. How do you engage them? Through this simple device, digital engagement. So, we think more of digital products now, which we would be offering to the Nigerian youths via this phone alone. And I am sure they are going to subscribe to it.
What is NIPOST doing to bring its staff abreast of new developments in the organization, especially in the area of Staff Training?
Recently we had zonal retreat because NIPOST has been restructured into seven zones, where the foot soldiers have been brought on board. Training is a continuous process. I have been in this seat for 18-19 months ago. The address verification scheme that I’m talking about, experts are training our people. Part of the scheme we are looking at is that when we are recruiting new people who are replacing people who are exiting, people who are retiring, we give some training, a new orientation. They will go through an onboarding process where management, human resources experts will train them. We will also second them for an internship with some of our partners who are technologically driven. Obviously for us to have won this award, we must have some partners who have sound knowledge in technology, these people will train some of the people we are talking about who will come into the organization and train others, meaning train the trainer.
What will NIPOST look like with the Postal Reform Bill?
Postal Reform Bill is about the partial commercialization of NIPOST, which the National Council on Privatisation and Bureau for Public Enterprises are driving. It is also to attract foreign and local investment into NIPOST. Obviously, when you diversify, you come in new products, you need additional hands, which means that you need people from the private sector to come and join you. Another issue is that naturally, it will then give us an opportunity of harnessing our real estate property that we have everywhere. So, until the Bill is passed, we cannot do all these. These are some of the benefits of the Postal Reform Bill.
NIPOST should not be afraid of competition. That is why we are also surrendering our regulatory power. When they pass the Postal Reform Bill, NIPOST will cease to be a regulatory authority for courier companies, because we are also involved in it. That is a way of encouraging us to be competitive so that they don’t give you some kind of government protection and you become kind of lethargic. Your business will not be a sustainable one if you embark on that model.
The government will set up a new regulatory authority, and it will be the responsibility of government to get the people that will drive it. That is what is being done in other jurisdictions of the world.
The Future NIPOST
What NIPOST are we to see in the next 18 months when these products come on stream? It will be NIPOST that is innovative; a NIPOST that is customer-centric; that will ensure that the customers that patronize us have pleasant experiences so that there will be multiplier effect; a NIPOST that will realize its responsibilities; a NIPOST that will give addresses to Nigerians. The last 25 years we have not been able to do that. I don’t like to blow my trumpet, we don’t like to blow our trumpet. We want Nigerians, particularly the critical Press, to look at what we are doing and then say “this is NIPOST of today, NIPOST of the future”, it is a NIPOST that will be globally competitive. I want to give FedEx and DHL a run for their money because they don’t have our reach. As we speak today, in terms of volume that we carry or we send from place to the other, none of them has our volume, but we charge abysmally low price because we have been subsidizing. When we improve our processes and deploy technology, there will have to be a time when we will hold the bull by the horn. Even if we are not going to charge commercial prices, we should be able to break even. And one thing that we have done is that for the first time in the history of this organization, the International Postal Service (IPS) latest version 2015 Track and Trace, we have installed. Which means you can track and trace your parcel, your packages online real-time 24/7 from the comfort of your home, your offices. It cost money but we believe that we are getting ready to charge commercial rate.
We are going to have our own e-commerce platform, which is called NIPOST Mart, basically to deal with locally produced goods. We want to assist owners of medium and small enterprises in showcasing their products, a lot of them don’t know how. Again, we have entered into a memorandum of understanding with the Bank of Agriculture, which is a way of assisting farmers in the rural areas with storage, new techniques of planting, where you can sell your products. Information, as you know, is power.
As a federal government arm with all these laudable projects in the waiting, will funding be an issue to actualizing this dream?
Funding is a major challenge. For any organization, it will always be a major challenge. And I think I made reference to it that while waiting for the enabling laws to be passed for us to unlock the opportunities in electronic stamps, e-Commerce and others, we are also coming up with other products that will earn us income. So, funding is a challenge, but we are not sitting back helplessly, we are also thinking out of the box to look at other possible areas of money making.