MPC upbeat on revival strategy
Recently, the board and management of Malawi Posts Corporation (MPC), led by the Ministry of Information, met the Parliamentary Committee on Media , Information and Communications on some issues affecting. Our reporter GRACE PHIRI engaged MPC acting postmaster general Zacheaus Mwase to shed more light on their performance and turn-around startegy
Q: MPC has a debt portfolio of K10.04 billion mainly due to unserviced statutory obligations and creditors. MPC needs government to settle statutory arrears and coupons against the unsettled appropriations for 16 years. How did this come about? How do you intend to clear this?
A:MPC was given a mandate to run postal services and financial services that would necessitate transmission of mail. MPC was going to get money from appropriation of Parliament and Universal Service funds. At the time MPC was splitting with MTL, MPC was given 180 postal offices with 120 in rural areas. The understanding was that this was not going to be an economic activity but mostly social activity. You can’t run a rural post office and expect to generate profits, but because of the United Postal Union and all other agencies, we could not close any. We sustain them as stipulated by the Act.
We have accumulated bills in the region of K10.4 billion in 16 years MPC hasn’t gotten any financial support. It would mean that from all trading activities, money has been used to finance the social element which has affected profitability and business sustainability.
Of the K10.4 billion, K6.9 billion was tax arrears for the past 20 years .
We have been in discussion with government because on the other hand, MPC is owing various institutions and government needed to give MPC appropriations which only came five times in 21 years. We could have got at least K12 billon, but this wasn’t forthcoming. Now we are in debt and knocking on the door of government since they are 100 percent sharehokders.
It has been a song that MPC has been singing over the years requesting for support from government which was not forth coming but now government has taken a heed to have the situation resolved. At the end of this month, we should have a meeting with government where we can look at various issues to be resolved as an initial step to the change programme that we have put in place. We are hopeful that government will come in hand.
Q:MPC runs a network of 180 post offices where 120 were loss making. This figure has grown to 140 currently. These are post offices whose running costs could be a staggering K600 000 monthly, but can only sale K1 000 to K5 000 monthly. Additionally, we understand that MPC is overstaffed by over 500 employees. At the same time, the corporation needs about K220 million in staff costs monthly but can only raise up to K160 million monthly. How do you intend to get out of this situation?
A:This parastatal was established by government as stipulated in the Communications Act. The challenge has been how we bring sustainability to these units so that the business is sustained. We have had various conversations in that regard to mitigate the losses and bring in sustainability because they are not sustainable in business sense.The staffing costs are on the higher side.
But if we can analyse the whole business, you realise that most of the things have changed over the period. We used to have the postal department as heartbeat of business but that has been replaced due to technology changes. But,we still have people that used to work during that time. Currently, we have 10 people that can do a job requiring one or two people. Our staffing situation is also as a result of the fact that 95 percent of our postal business has been eroded by emerging communication options such as the Internet, mobile phones calls and social media.
But then,can we close post offices?The answer is yes or no but it is a discussion we are having withgovernment. When we meet, we will have a common ground for business sustainability.
Q:With technology, letter writing among individuals has dwindled. Some service providers such as water boards who were using post offices have resorted to online billing or hand delivery. What is the impact of this?
A: It is universally agreed that postal services have been going down globally. It has been at three percent decline but in our country, we have gone down by almost 95 percent. Now the question is, what should become of the essence of the post amidst the change? So, the post is wearing a new face because the problems MPC is facing are not new to Malawi. These are challenges globally.
Q:MPC has developed a turnaround strategy that seeks to provide a 360 degrees change for competitiveness. How is this a game changer?
A:We just put up a strategy to get postal that commences in 22 for the next five years. It seeks to get postal administration and respond to thecurrent changes in the technological world. So, we are pursuingdigitalisation and e-commerce in which case as a country also. We are now starting to see how we can optimise use of our postal network to make sure that not there is business sustainability but also that we are connecting communities.
Q:Recently we saw MPC diversifying to commuter bus services. What has been the performance and experience?
A:The key issue for us is to make sure that we are more efficient in course and transport business. With that urge, we intend to introduce more to facilitate transmission of parcels and people. We have gone through a lot, but all these help us to frame our standards, focus on the challenges and how to deal with them. The courier business has been a mixed bag, but we have been managing. Mixed bag because the Covid-19 came in and along with it restriction on transportation business.We are catching up but since it’s a relation with a bank. We remain committed that we are going to sail through.
