Nigeria’s NIPOST to diversify into eCommerce, financial services

NIPOST

The Nigerian Postal Service, NIPOST, would soon be unbundled into five companies.

The move is part of the plan to make the government enterprise more effective and profitable. The diversification will see NIPOST investing in eCommerce logistics and core financial services such as banking and insurance.

The Minister of Communications, Adebayo Shittu, said the postal service will be unbundled into NIPOST Banking and Insurance Company, NIPOST Property and development Company, NIPOST Transport Company, NIPOST e-Commerce Services and NIPOST e-Government Services Company.

He was quoted by The Nation that: “These five new companies are platforms within which investors can make enquiries, come in and invest; the opportunities within these five companies will be limitless.”

The fact that NIPOST is going into eCommerce also bring about a new dimension to the operation of a government-owned enterprise. The Nigerian eCommerce sector had seen major hiccups in its operations with many either folding up or selling off their assets at rock-bottom prices.

It would be recalled that Konga’s owners Messrs Kinnevik AB and Naspers sold the company to Nigeria’s Zinox Group, owners of Yudala. It would also be recalled that Konga had its own logistics arm called KExpress. Jumia its major rival had its own proprietary logistics operations while adding other third-party providers to augment lapses.

An industry analyst who spoke to PageOne.ng said the possible floating of an eCommerce logistics business by NIPOST will further disrupt both the logistics and eCommerce business in Nigeria.

There are also major global giants in the logistics business who for many years have been complimenting NIPOST and rarely competing with the public company. The plan to move into proper eCommerce logistics business will see NIPOST take on DHL, UPS and Fedex to compete for mostly foreign packages coming into the country from eCommerce giants such as Alibaba and Amazon

Adebayo did not disclose the modalities for the unbundling or whether it would be done via a public-private partnership, PPP.

NIPOST was founded in 1987. The company has faced various operational deficiencies despite being the largest postal and logistics provider in Nigeria.

Last month, NIPOST disclosed that it made a gross revenue of N26 billion for the 2017 financial year.