New laws coming to try and save the South African Post Office

2 years ago 5

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The Department of Communications and Digital Technologies has tabled the South African Post Office Amendment Bill (2022) before the National Assembly.

This is the next step in getting the bill adopted and enacted into law, which would see the SAPO’s mandate change, allowing it to expand its services and offerings, particularly in the e-commerce and courier space.

The Post Office is in dire financial straits with the group being placed under provisional liquidation.

Since 2013, the SAPO has been losing millions in taxpayer money every year, and these losses have been steadily increasing. As a result, has been forced to cut its workforce and shut down branches.

SAPO’s liabilities outweigh its assets by R4 billion and the group carries debt of R8 billion. In the latest 2023 Budget, National Treasury announced the SAPO would get another bailout of R2.6 billion from government coffers. This follows years of bailouts and bailout requests.

Meanwhile, the group said it has been left with no choice but to retrench some 6,000 people – 40% of positions – due to its financial constraints. It noted that the wage bill makes up 68% of its costs, and its business has become unsustainable due to private courier companies encroaching on its services and the government itself steering clear of using it.

Among the the various amendments proposed by the bill, one of the key aims is to address the Post Office’s financing problems.

In the proposed laws, government institutions – which include national and provincial departments, national and provincial government components and municipalities – will be encouraged to use service offerings by Post Office and its infrastructure in the delivery of their services.

They will also be encouraged to set aside certain services to be provided by the Post Office – all in a bid to assist in eliminating the group’s over-reliance on government funding.

The minister of communications and digital technologies, Mondli Gungubele described the bill as part of a bankable strategy to transform the entity and make it profitable for business once again.

Changes

According to the department, the bill’s main aim is to expand the mandate of the South African Post Office, and repurpose the SAPO infrastructure to provide diversified and expanded services.

It said this will be done by exploiting the group’s current infrastructure capacity to extract value and forge partnerships with other stakeholders.

The proposed laws will also revise the governance structure of the SAPO by establishing, appointing and detailing the functions of a Stamp Advisory Committee and to provide for matters connected with it.

Some of the more notable proposed amendments include:

SAPO providing logistics and e-commerce services and serve as a logistics partner for e-commerce and other logistics players, including SMMEs and informal traders;
SAPO serving as a digital hub for businesses and communities;
SAPO providing different services at the post office and service points based on the needs assessments for a particular area and to ensure the effective usage and enhancement of the retail offering and services – and charging different fees for different services and areas, subject to the approval of the Authority.

The Post Office will also be allowed to continuously adjust its business model in line with the technological and industry developments in the provision of postal services and other services – including the roll-out of service points and the use of third-party infrastructure and other related services subject to the approval of the minister in charge.

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