Use postal services to sustain local economies

A Nigerian advert is stoking controversy on Africa’s priorities. 

In this CNN advert, a wealthy-looking woman explains the importance of wearing masks. Poverty-stricken children try on the expensive glassy-looking brand of mask. 

In the background is the advert with the message that for 2,299 Naira, the protective gear will be delivered to your doorstep by Universal Parcel Service (UPS).

The problem is that from the advertising medium to the product and the courier service, nothing is Nigerian, except the consumers. Strangely, UPS is preferred over Nigerian Postal Service (Nipost) which offers parcel services, e-commerce and logistics, financial services, mails, counters, and even a training school.

My quick research shows that Nigeria is endowed with locally manufactured masks, but many such adverts have a subtle message – local is poor quality – and could not possibly be legitimate. This narrative is similar across the continent where imports and foreign companies are given preference by consumers over local establishments.

Neither government nor the people have risen to demand that local money remains local for the greater benefit of the communities. Indeed, governments in Africa are the first culprits in undermining local circulation of money to sustain local economies.  

Most government parcels are carried by private enterprises. Why? Because many of the government-owned enterprises lost competitiveness as a result of thinking that they are too big to fail or do anything as mundane as delivering an urgent parcel to a customer on time. 

Unfortunately, every other postal service on the continent harbours the same mentality. As a result, they have lost the trust and confidence of the people. Despite the many opportunities these enterprises have to share ideas, they seem not to understand that they are in dire straits. 

Instead of thinking innovation, many of them seek support from their governments.

They are losing their lunch to new, digital and nimble courier companies, which now use digital to deliver bills and other documentation to their clients. What they refer to as innovation are models discussed at Universal Postal Union that more often than not alienate the true customer who now finds private courier services responsive to their needs.

It is becoming difficult to make the case for postal services in Africa as a strategy to sustain local economies. When Posta Kenya tried to persuade the National Assembly to make it mandatory for companies to have letterboxes before registration, the office of the registrar of companies swiftly opposed the move as retrogressive in the digital era and could claw back gains made in the ease of doing business in Kenya. 

A quick survey on the role of Postal services revealed serious responses that policymakers need to be aware of. The majority of generation Z have no idea what the role of the postal service is and those who are older see no reason for visiting a postal office. 

However, many of the respondents have used different courier companies, including global ones.

As bad as it looks, all is not lost. Some postal services could claw back their glory. In Kenya for example, by March 2020, the number of courier companies as per the Communications Authority of Kenya’s register were 253 and growing.  

Due to the spread of broadband, many cities, municipalities and towns are becoming convinced that many other services can be overlaid on the existing infrastructure to create a nationwide e-commerce infrastructure for micro, small and medium enterprises (MSMEs).

The state must relinquish its control over these giant corporations through privatisation or corporatisation to make them viable enterprises. If the new organisation creates an agency network throughout the country, it will attract other organisations like telecommunication companies to sell their product. 

It will perhaps be the best model, given that there may not be any redundancies of staff. Their roles, however, could change.   

Their first task is to understand the growing number of digital customers and begin to leverage technology to build trust. The idea of leveraging local services and goods is critical to economic growth. 

Research shows that when money circulates locally, it has positive economic effects, including: helping small businesses to be sustainable, create local jobs and a sense of community.

We need to learn from other communities. A study, Asians keep a dollar in their community 120 times longer than African Americans, by Nicole Kenney, an economic programme specialist with National Association for the Advancement of Colored People (NAACP) established that:

“A dollar circulates in Asian communities for a month, in Jewish communities approximately 20 days and white communities 17 days. How long does a dollar circulate in the black community? 6 hours!!! African American buying power is at 1.1 Trillion; and yet only 2 cents of every dollar an African American spends in this country goes to black owned businesses.”

When we import foreign goods, promote them in foreign media and courier the goods with foreign entity, there isn’t a coin left circulating for our MSMEs to be sustainable.