National treasury has come to the rescue of the South African Post Office by approving a R150-million “virement”, which the department of communications & digital technologies said will “assist in addressing immediate financial pressures”.
The Post Office has been in business rescue – a form of bankruptcy protection – since July 2023. Last September, business rescue practitioners Anoosh Rooplal and Juanita Damons told parliament that the embattled organisation would have no alternative but to be placed into liquidation should a R3.8-billion bailout not be received by last November.
The state-owned company’s fate looked all but sealed when national treasury excluded the proposed bailout from the medium-term budget policy outlook statement in October, with finance minister Enoch Godongwana encouraging the department of communications to “find the money” to assist the entity.
“This support is crucial in ensuring Sapo (the Post Office) meets its obligations to employees and continues delivering essential services to the people of South Africa. Beyond this immediate relief, the department is actively pursuing long-term measures to stabilise and sustain Sapo,” the communications department said in a statement late on Tuesday.
According to the statement, the communications department is working with a joint task team made up of representatives from national treasury and the Development Bank of Southern Africa to explore private sector partnerships with the aim of ensuring the Post Office has a sustainable future.
Parliamentary portfolio on communications chair Khusela Sangoni Diko has, however, said there is a need for urgency from government since R150-million is not nearly enough to save the troubled company. It’s not clear where the money might come from, though, especially in light of the recent rejection by members of the government of national unity of Godongwana’s proposed hike in the VAT rate.
‘Too little’
“The funding is too little to make a meaningful impact as it only sustains the operations of Sapo for one additional month and does not go far enough to address the challenges facing the Post Office,” Diko said in a statement.
“The announcement coincides with the committee’s oversight visit at Sapo and is an unfortunate practice developed by this ministry to govern by public relations, as in the State IT Agency case, as they issue erratic statements designed with the intention to be seen as bold actions which coincide with the committee oversight visits. These statements serve no value except to kick the can down the road and distract from the real work that needs to be done,” she said in pointed criticism of communications minister Solly Malatsi, a Democratic Alliance MP.
Read: Make or break time for the South African Post Office
A spokeswoman for the business rescue practitioners told TechCentral that they will not comment on the matter until the funds that have been promised by treasury are received.
The communications department, however, remains firm in its conviction that the Post Office is still a crucial institution in South Africa’s communications landscape that must be saved.
“Sapo remains a critical national asset, uniquely positioned to enhance service delivery and provide affordable postal, courier and digital services – particularly to underserved communities, thanks to its extensive national footprint,” it said. – © 2025 NewsCentral Media
Get breaking news from TechCentral on WhatsApp. Sign up here