Kagwe upbeat on ailing Posta’s turnaround drive

Postmaster-General Dan Kagwe has been sitting in an unenviable position since he assumed his role in March. He took charge of a public entity whose revenues were falling amid threats from new technologies.

The Postal Corporation of Kenya under his charge has in the past tried every trick in the book to survive, including writing off debts in a bid to woo back customers.
Mr Kagwe discussed his strategy with MUTHOKI MUMO.

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Now that you’ve been confirmed, what is at the top of your strategy for Posta?

There is repositioning of postal services to be useful to the general public irrespective of the areas where they live in Kenya. We also need to build confidence that the brand is efficient, affordable and can deliver. And then, we need to start working with the government. I would like to see Posta as a major partner of government logistics and services.

Official data shows that state institutions opt for private couriers for light shipment. Where did Posta go wrong?

Part of it is simply corruption; I give you business, I get my cut. Even in government institutions the reason why some people give out business is not because Posta is not efficient, it’s because of corruption, simple.

If, as you claim, Posta is efficient, why does the perception of inefficiency persist?

I like the way you put it, “perception”. We did 70 million letters last year. An institution that can deliver 70 million letters, would it be inefficient?

Depends on when they deliver them.

I think this “perception” arose during those times of separation of former KPTC.

I think within that transition Posta was poorly funded and there were a lot of inefficiencies, there was pilferage, people losing their materials. And I think it’s taken quite a while to recover from there.

What are you doing to correct the perception?
We must communicate our capability. And we must ourselves be efficient, beyond any reasonable doubt. That is the only route, there is no other one.

What does technology mean for Posta?

Bigger business, more efficient way of doing business. Faster turnaround times. The future is e-commerce.

Last week you advertised for companies to help you develop a mobile application. What need will this be filling?

We’ve got so many scattered things that if you go to our online portal, you might not find what you want. What we’re looking for is one entry point. We want to have a pipe that gives you access to all our services.

You’ve launched quite a few new products such as Posta Mknononi, Travel Lite and there has even been talk of a mobile money application. How many do you think will survive and how many are just trials?

To me it’s not many ideas. The more ideas, the better. If you have 40 ideas and one grows to be the future M-Pesa, frankly speaking it will be worth the trouble.

How is mPost doing?

It must be over 30,000 users. We’re now linking with Huduma Centre and soon we’ll link it with National Transport and Safety Authority. What this means is that if there is a physical item that these institutions want to deliver, it will be done through an mPost number.

We are also talking to immigration. When your box number becomes your phone number, then you’re more trackable.

How will your planned mobile money application compete with the telecoms that have legacy advantage?

Somebody has got to do it. Somebody has got to give these guys a reality check on this business because who else has the capacity to reach those who are marginalised in financial and telecommunication services? It’s only Posta.

Once your mobile money is here, will I be doing the same things I do with M-Pesa?

Most likely.

Are you going to become a telecom?

No. We’ll always be a postal service.

Are you going to give SIM cards?

We might, why not?

But then that would mean you become a telecom

No.

How far away is this mobile money dream?

We have already approached the government to have a Public Private Partnership (PPP). And we’re hoping it can be approved quickly. I wanted to do it before Christmas. It will be a nice Christmas present to Kenyans.

Isn’t that a bit ambitious?

I think that’s why I got the job. If we did things the way we’ve always done them, we’d never change.

Last year Posta wrote off debts on outstanding post office boxes. What was the impact?

We recovered almost 75 per cent of the people who had not paid.

You’re trialing a passenger bus with the UPU but in the past you’ve said that Posta will not go into passenger transport. Is that still the position?

Yes. We’re not in the passenger business. We’re in the logistics business. It was a project of the UPU to see how it can work in Kenya. Incidentally, it’s been really positive. It’s been convenient for our packages going to those routes. People love it.

But still you don’t want to expand into this area. Why?

Can you tell me one successful bus company over the last 10 years?

What new products and services are on the horizon?

We want to roll out postal shops in every post office. They will be small supermarkets within post offices and people will be free to sell their merchandise. If you’re selling a brand, this brand will now be available in 623 outlets. There isn’t a bigger supermarket chain.

What excites you about the future of Posta?

One, it must be profitable. I want it to grow its reputation to a level where when you finish college you say you want to work for Posta.