2023-11-30 07:58:15
The postal sector proves to be an essential pillar for financial inclusion, but remains confronted with pitfalls which prevent it from releasing the value chains it contains. In a context of financing and infrastructure deficit, the challenge is great but not insurmountable for the actors.
What MIDA / Photo: Infrastructures postales
Assuming a total absence of postal infrastructure, a country’s annual gross domestic product (GDP) would suffer a median reduction of 6.96%, according to the Report on the Situation of the Postal Sector in 2023 entitled “Hypercollaborative path towards postal development” of the Universal Postal Union (UPU). This revelation demonstrates the importance of the sector and the strong correlation between economic development and postal development, eclipsing the usual rate of direct contribution of postal services to GDP which is generally between 0.5 and 1%.
The figures are particularly eloquent in Africa where the sector generated a cumulative income of 890 million US dollars on a cumulative GDP of around 2,980 billion US dollars in 2022. In total, 65% of this GDP comes from the financial sector of which 35% of traditional post. With more than 25,000 offices and 59,048 employees last year, the African postal sector remains an essential pillar for financial inclusion, according to consultant-trainer Perfect Enagnon Agblonon, former director general of the Post Office of Benin. Better still, he adds, it makes it possible to develop logistics and thus the economic resilience of the continent.
The postal sector plays a vital role in connecting remote areas, underserved communities, thereby facilitating trade, transportation of goods and services, and distribution of mails, parcels and goods. However, many African countries face financial constraints that hinder the development and improvement of their postal services, reports Judith Baï Glidja, general director of La Poste du Bénin.
Financing issues
Where can we find money to build a strong, sustainable and resilient post office? The question was at the heart of the forum on financing the postal sector in Africa held from November 21 to 23 in Cotonou. The issues related to financing the postal sector in Africa are multiple and include the modernization of postal infrastructure, staff training, the adoption of new technologies, the diversification of services and competitiveness in a constantly evolving market, estimates Judith Glidja. Additionally, she continues, the increasing digitalization of communications is impacting demand for traditional postal services, requiring strategic adaptation to ensure the viability of the sector.
It is a question of working to create world-class connectivity infrastructures to enable the postal sector to fully play its role. We realize the importance of the postal sector’s contribution to achieving each of the Sustainable Development Goals (Odds). “The postal sector can make a relevant contribution to achieving each of the Odds.”
Among the obstacles to the growth of the sector, the expert highlights geopolitical tensions and conflicts, the inadequacy of the postal network in relation to the multiple and multifaceted needs of customers, limited access to advanced technologies, the difficulties of regulation of the informal sector which represents at least 36% of GDP in Africa. Also, the postal sector works in a contestable market and remains labor-intensive instead of being a knowledge-intensive sector, he adds. This involves recruiting talent and developing skills in the sector. It is also about filling the crucial infrastructure gap. The African Development Bank (AfDB) estimates the need for infrastructure financing in Africa at $108 billion per year.
Levers
For Judith Glidja, the desired changes in the postal sector cannot be made without support from the State and other strategic actors. Indeed, she explains, depending on the specific needs of the postal sector and government objectives, this support can take the form of direct investments, the establishment of a favorable regulatory environment, tax exemptions, support to innovation, the development of universal postal service policies.
For his part, the expert Perfect E. Agblonon wonders whether we should not turn to development banks and commercial banks, deposit and consignment funds, the dormant savings of pension funds or the markets financial, instead of waiting for government funds with their constraints. He suggests establishing partnerships with the private sector, while placing emphasis on innovation, the assembly of eligible and bankable projects and best practices aimed at removing bottlenecks in the sector.
To do this, it is important to act on four levers to meet the challenge of financing the postal sector, according to the expert. He cites: connectivity and digitalization of networks, the establishment of an efficient customer journey, support for the energy transition and open innovation or hypercollaboration, in particular openness to start-ups capable of support the development of the postal sector.
For him, the entry into force on January 1, 2021 of the agreement creating the African Continental Free Trade Area (Zlecaf) constitutes a “big opportunity” for the development of the postal sector, in the sense that the continental market represents 3.4 trillion dollars. The investment of a record amount of more than $2 billion made in 2021 in financial technology companies in Africa is also an opportunity to be seized. Postal players will have to find ways and means to convince States and institutions to better invest in this promising sector, he recommends.
QA November 30, 2023
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