The Continuing Saga of the South African Post Office (SAPO)

SAPO enjoyed 2 good bits of news in June: first it managed to escape being placed under liquidation, and second, the Department of Communications and Digital Technologies (DCDT) has introduced the South African Post Office Amendment Bill (2022) before Parliament. 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 for ecommerce and courier services.

Since 2013, the SAPO has been losing millions of Rands every year, and these losses have been steadily increasing. As a result, has been forced to cut its workforce by an estimated 40% and shut down branches. Its liabilities outweigh its assets by R4bn and the group carries debt of R8bn. In the 2023 Budget, National Treasury announced that SAPO would get another bailout of R2.6bn from government coffers. Among the various amendments proposed by the Bill, one of the key aims is to address SAPO’s financing problems by forcing (opps, sorry I meant “encouraging”)  all government offices to use its services. According to the DCDT, the Bill’s main aim is to expand SAPO’s mandate, and repurpose its infrastructure to provide diversified and expanded services, by exploiting the group’s current infrastructure capacity to extract value and forge partnerships with other stakeholders. EFSA as a stakeholder has been underwhelmed previously by SAPO’s interest in engaging with stakeholders, coupled with its atrocious services and absence of track and trace throughout the logistics process.

Some of the more notable proposed amendments include that SAPO:

• provides logistics and ecommerce services and as a logistics partner for ecommerce and other logistics players, including SMMEs and informal traders;
• serves as a digital hub for businesses and communities;
• offers 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.

Basically these are all points SAPO had set out a decade ago, but which were not acted upon – due mainly to lack of funds and an unskilled workforce. SAPO 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.

Readers will recall that SAPO and its regulatory body ICASA have an ongoing case against PostNet for ignoring the last mile monopoly. This case remains before the Court.