Between Postal Services and Capital Market Mails

The continuing decline in capital market mails is becoming a source of worry for the bulkpost venture of the Nigeria Postal Service which informed the choice of the theme of this year’s Bulkpost Customer Forum, writes Emma Okonji

The Nigeria Postal Service (NIPOST) became an independent department following the separation of post from telecommunications on January 1, 1985. Through the promulgation of Decree No. 18 of 1987, NIPOST became an Extra-Ministerial Department.

However, the history of the post in Nigeria dates back to 19th century when the first post office was established by the British colonial masters in 1852. It was considered to be a part of the British postal system and a branch of London General Post Office.

But since the separation of post from telecommunications in 1985, which led to the emergence of NIPOST, postal activities, which include mail delivery, were the prerogative of NIPOST. Then NIPOST was considered  as one of the major revenue generation entities for Nigeria.

From 1985 when NIPOST emerged to1995 when the Nigeria Internet Group (NIG) was established, up till 1998 when the internet awareness drive began to penetrate into Nigeria, there was a boom in postal services in Nigeria. Also the volume of capital market mails increased but the advent of the technology of emails during the early days of the internet brought about the gradual decline of postal services, since those who had internet access preferred sending electronic mails via the internet, as against the writing and posting of letters. In the same vein, the volume of capital market mails started shrinking as a result of technology evolution and the decision of the capital market operators to cut cost in the production and delivery of capital market mails like dividend warrants and notices of extra-ordinary meetings for shareholders.

The courier industry that was involved in faster mail and parcels delivery also benefitted from the boom era of postal activities, but few years down the line, the effect of technology evolution started affecting the volume of mail delivery through the post and courier services. The  capital market mails witnessed  sharp decline in the volume of documents for the notices of annual general meetings (AGMs) of shareholders as well as dividend of shareholders as a result innovation in technology.

The continued decline in the capital market mails has become a concern to the Bulkpost Venture of NIPOST, which usually handles volume of documents from the capital market. The concern, no doubt, led to the choice of the theme for this years' Bulkpost Venture Customer Forum –“The Enormous Decline in the Capital Market Mails," held in Lagos last week, with a view to addressing the sharp decline in capital market mails delivery in the country.

The concern

Explaining the level of seriousness, which NIPOST management attaches to issues in the capital market business, the Postmaster General of NIPOST, Mallam Ibrahim Mori Baba, said: "Events taking place in the capital market, coupled with the rate of decline of capital market mail volume in the past two or three years, have become issues of serious concern, not only to NIPOST as an organisation, but also to shareholders and other stakeholders."

According to him, the capital market has undoubtedly become one of the importance determinants of real economic growth, social progress and improved standard of living, having contributed major percentage in the increase of Gross Domestic Product (GDP) through a healthy and buoyant activities in the capital market that have led to increased dividend for shareholders, more activities and capital to NIPOST management, and more revenue for government.

He, however, said that technology evolution affected global communications, which also affected the volume of capital market mails that used to be a huge source of revenue for NIPOST and courier operators. This situation, he said, would demand an urgent change in postal administration, to enable the post meet new demands from customers that have become technology savvy due to global technology trend.

President/Chairman, Institute of Capital Market Registrars, Mr. Bayo Olugbemi who chaired this year's annual Bulkpost Customers’ Forum that was held in Lagos recently, called on NIPOST and courier operators in the country to begin to think of innovation that is in line with modern technology trend that is gradually shifting from paper-based activities to paperless-based activities, where electronic mails are fast taking over from the physical mails that were hitherto delivered by courier operators and the Bulkpost Venture of NIPOST.

“The choice to move away from paper information and go digital is occasioned by technology trends that are fast sweeping the globe,” Olugbemi said, while advising courier operators and NIPOST, who largely depend on the documents from the capital market, to start thinking of how to innovate with technology and use technology to drive their courier business, or face extinction from the industry within a short period of time.

The challenges

Looking at the challenges posed by the decline in the volume of capital market mails, the Managing Director of Ebony Express, a frontline courier operator, Mr. Okey Uba, said in his paper presentation with titled:”Postal Industry and Capital Market-A Synergy for Wealth Creation”, that the capital market and postal service operations in Nigeria had witnessed a steady and progressive growth through the generation and delivery of capital market documents, from 2004 to 2008. He, however, lamented the situation  where in recent years, there had been sharp decline in the production and distribution of these documents, especially the annual reports and notices of extra-ordinary general meetings, which he attributed to changes in technology development and the need for the capital market to cut cost of production of the documents.

According to him, innovation in technology, which is gradually shifting from paper-based activities to the era of digital technology, compelled the capital market to start thinking of using electronic means like the emails to send dividend warrant to shareholders, instead of the usual bulk printing and delivery through the Bulkpost Venture of NIPOST and other courier companies.

"This development is threatening the hitherto cordial and profitable relationship between the capital market and the postal industry. It has even gone further to disorganised the complete web of activities evolved in capital market operations and that of other stakeholders," Uba said.

He said no industry operates in isolation, else the principle of redistribution of wealth be truncated. “When this is allowed to happen, companies and subsidiary companies will go into extinction, with resultant loss of jobs. The effect of general loss of jobs in an industry on the society, especially on security, is better heard than experienced. This explains why developed countries, with their perfection in Information and Communications Technology (ICT), deem it plausible not to completely dematerialise their capital market documents," Uba said.

The solution 

Giving solution to the challenges posed by the sharp decline in capital market documents, Uba said the capital market and postal operations are channels of Nigeria's economic development and that the onus lies on capital market operators and their registrars to adhere to the set rules of the market, which stipulates that the capital market must produce the necessary documents that are due to the least shareholders, in the most accessible terms. This, he argued, would help halt the continued decline and rebuild the much desired confidence by the investing public in the capital market. He, however, called on the postal industry to strive to meet the challenges of effective and efficient delivery of such documents to the shareholders. He also encouraged them to begin to think in line with technology innovation, in order to remain relevant in business.

Corroborating Uba's position, the General Manager, Bulkpost Venture, Dr. Michael Umo, who confirmed the decline in capital market documents,  said the decline was deliberate. He  blamed the situation on most registrars, whom he said, discriminate against shareholders with little units of shares  by not printing their dividend warrants and notices of meeting, even when they still print for shareholders with large units of share holdings.

"Should they print for every shareholder, the volume of capital market documents
will not reduce and those that are supposed to superintend over them, are not concerned about it," Umo said.

He alleged that the registrars were only trying to cut printing cost, hence the discrimination in the print and dispatching of shareholders' documents.
On the issue of delayed delivery of documents to shareholders, whereby some shareholders get letters for notice of extra ordinary meetings, weeks after the meetings must have been held, Umo exonerated the Bulkpost Venture. Rather  he  blamed the delay in delivery of dividend warrants and notice of annual general meeting on the registrars, whom he said, send the mails very late to Bulkpost Venture. He therefore, called on the capital market operators and their registrars to ensure quick dispatch of the mails to the Bulkpost Venture, to enable it facilitate early delivery of the documents to shareholders.

Also proffering solution to the challenge, Mori Baba said the postal service operations have some unique advantages, including its extensive delivery networks, and that postal authority must find ways how these could be fully utilised.

"We have continued to incorporate new technologies into our network to reduce costs, improve quality, and increase consistency. We have made great strides in our efforts to modernise the postal service, through its post offices, by making technology an important area of concentration for viable change in postal operations and service delivery," Mori Baba said.

Industry analyst, Mr. Nornah Awoh, in his paper presentation at the Bulkpost Venture Forum, said the decline in capital market documents had been enormous and explained that in 2008, the industry witnessed about  three million document decline and in 2009, it recorded another  two million document decline, with more declines in 2010, 2011, 2012, till date.

Awoh who attributed the yearly decline in capital market documents to the new strategy of cutting cost, however, suggested that the postal service operations must begin to look at those things that could attract the youths to postal activities, since their population forms the bulk of the Nigerian population.

The postal operations must be revived, and the time to do so is now, Awoh said.
Since global technology change and the zeal to cut cost of operation in the capital market, are affecting the business of NIPOST and courier companies as disclosed by the Bulkpost Venture Forum, it becomes expedient for NIPOST and courier operators to begin to think of possible technology innovation that will drive traffic to postal operations and mail deliveries.