Why the Federal Government wants to ‘sell’ NIPOST

The Federal Government through the National Council on Privatization (NCP) has set up a committee to implement the partial commercialization and sale of the Nigerian Postal Service (NIPOST). Minister for Communications  Adebayo Shittu disclosed this recently while inaugurating a committee that would oversee the exercise.

Government has approved that NIPOST is partially commercialized in keeping faith with the Second Scheduled Part 1, Section 6(1) of the Public Enterprise (Privatisation and Commercialisation ) Act, 1991

Partial commericialization means NIPOST will have to generate a large proportion of funds for its operations except for capital projects.

What may have led to this decision ?

The government may have decided on the sale due to the poor performance of the agency in recent times. The advent of email means fewer letters are sent by post. Private courier firms enjoy more patronage due to their timely performance.  Selling NIPOST also lessens the financial burden of the agency on the government in terms of payment of salaries. The FG has been had pressed for funds due to a drop in crude oil prices and production volumes last year.

Details of the reforms

In addition to commercializing NIPOST, the agency’s dual function as a regulator  and operator will be split. A bill for the establishment of the Nigerian Postal Commission has been sent to the National Assembly.

When is this likely to happen ?

According to the Minister, NIPOST will be commercialized after the committee has finished its work in April next year.

About NIPOST

The Nigeria Postal service Department came into being with the establishment of the Nigeria Telecommunications Limited (NITEL) on January 1, 1985. NITEL emerged from the merger of the Telecommunications arm of the defunct Post and Telecommunications Department of the Ministry of Communications with the former Nigeria External Telecommunications Limited (NET).

Through the promulgation of decree No. 18 of 1987, NIPOST became an Extra-Ministerial Department. In 1992, Federal Government promulgated Decree 4 which classified NIPOST as a Government parastatal