The ailing South African Post Office has cost taxpayers almost R10-billion since 2014 – and it still wants more money from the public purse to keep it from going bust once and for all.
TechCentral reported last week that the Post Office, which has been in business rescue – a local form of bankruptcy protection – since July 2023, will receive a R381-million subsidy from the labour department’s Ters (Temporary Employer/Employee Relief Scheme) fund to help pay salaries for the next six months.
The grant follows a R150-million “virement” the state-owned company received from national treasury in February, which was described by parliamentary chair of the communications portfolio committee, the ANC’s Khusela Diko, as “not enough” to ensure the entity’s future sustainability.
Post Office business rescue practitioners Anoosh Rooplal and Juanita Damons have echoed calls made in November last year that the organisation will not survive without another R3.8-billion bailout. If granted, this would take the total in bailouts to more than R13-billion.
South Africa’s national budget, meanwhile, faces constraints on all sides as the moribund economy – which has been going nowhere for years – struggles to produce jobs and the tax base continues to shrink. Government’s debt-servicing costs are also ballooning.
The draft national budget for the 2025/2026 financial year is now in its third iteration following the rejection of a proposed 0.5 percentage point increase in the VAT rate, with finance minister Enoch Godongwana now expected to deliver a potentially radically revised budget speech next Wednesday. The rejected VAT increase has left an expected R75-billion shortfall in tax receipts over the medium term, forcing treasury to put budget allocations under a microscope with a view to ensuring government gets the most value for funds deployed.
10 ways to spend R10-billion
Not providing endless bailouts to state-owned enterprises is one obvious solution, where this is feasible. TechCentral investigated alternative ways the R10-billion already spent on the Post Office could have been put to use to derive greater benefit for the South African economy and its people. Here, then, are 10 ways to spend R10-billion in South Africa (without necessarily wasting it):
1. Fund the Aids funding shortfall
US President Donald Trump’s decision to cut funding via the President’s Emergency Plan for Aids Relief (Pepfar) programme has created a R7.5-billion gap in the funding for Aids treatment programmes across the country. South Africa is the country most heavily burdened by the HIV/Aids epidemic, with some 7.7-million people living with the virus as of 2023. R10-billion would go a long way in saving lives affected by the disease.
2. Introduce smart device subsidies
Communications minister Solly Malatsi achieved a major milestone in February when national treasury announced the removal of ad valorem taxes on smartphones costing R2 500 or less. The move is aimed at making 4G-capable devices more affordable for poorer South Africans who must migrate from older technologies before mobile networks switch off their 2G and 3G networks in the coming years. Including more South Africans in the growing digital economy is another major goal of this initiative.
Although lauded by mobile operators, industry analysts were critical of just how far this move could realistically go, arguing that more aggressive tax cuts along with consumer subsidies would make a real difference.
By TechCentral’s calculations, R10-billion could fully subsidise four million South Africans with a 4G-capable device costing R2 500.
3. Fund 40 000 Nsfas students over four years
Years of stagnation have created a scenario where the economy does not have the capacity to absorb new entrants into the workforce, but there are other complexities to South Africa’s unemployment problem. The skills mismatch between what employers are looking for and what job seekers are capable of is a big problem. This is where education and training is meant to create an alignment between demand and supply, but for many South Africans, affordability is a major issue.
According to the higher education department, the National Student Financial Aid Scheme (Nsfas) has an average annual spend of R68 000/student. Over a four-year qualification, this amounts to an average spend of R272 000/student. R10-billion could pay for the training of nearly 37 000 students.
4. Set-top box subsidies for digital migration
Government’s failure to install a sufficient number of subsidised set-top boxes to indigent households is one of the major reasons behind the failure of its digital migration project. TechCentral reported in January that installers complained of delayed payments and significant decline in the amounts paid for work done.
Assuming a total cost of R1 500/installation, government could have used the Post Office’s R10-billion to install 6.7 million set-top-boxes across the country. This amount would have covered the initial 500 000 households earmarked by government as well as the more than four million other households that would be cut off from television should analogue signals be switched off.
5. Fixing traffic lights
President Cyril Ramaphosa in March expressed disappointment at the state of Johannesburg. Joburg mayor Dada Morero said increased vandalism has forced the city to take additional measures when fixing broken traffic lights, inflating the cost of repair around to R300 000 on each of the estimated 250 intersections that need attention. These repairs would only require R70-million of the Post Office’s R10-billion, leaving a lot more in the budget to fix the thousands of potholes across the city and the other infrastructure issues that are not being dealt with. Of course, all this assumes the money doesn’t get stolen by corrupt city politicians.
6. Internships for 83 000 out-of-work graduates
Another way to address South Africa’s youth unemployment problem is to give young people the necessary exposure to the work environment, making them more attractive to prospective employers in future. A R10-billion budget could subside 83 000 year-long internships with a R10 000/month stipend for each intern.
7. Subsidised solar geysers for a million households
Despite Eskom’s assurances that load shedding will soon be a thing of the past, the reality is that South Africa’s energy security remains uncertain. Stage-2 power cuts were announced by the state-owned power utility just this week. Reducing the amount of strain on the national grid is one way to approach the problem, and since heating is one of the main draws of power from households, solar geysers could help stem demand considerably. At R10 000/installation, government could fully subsidise a million South African homes with solar geysers.
8. Funding of the national school feeding scheme
Government’s national school feeding scheme is an important adjunct to the education system, allowing millions of children to focus on issues of schooling instead of an empty stomach. For many who rely on the programme, the meal they have at school is the only one they have all day. Government spent R8.4-billion on the programme in the 2022/2023 financial year and R10-billion could keep South Africa’s schoolchildren fed for another year.
9. 1GW solar farm to add to the national grid
While the solar geyser idea approaches the load shedding problem from the demand side, adding 1GW of renewable power to the national grid would help tackle the supply side. It would cost around R10-billion to build a 1GW solar farm. This could reduce load shedding by an entire stage.
10. A hundred doctors for 10 years
The average salary of a public sector doctor in South Africa is a little over R1-million. With R10-billion – increases and overtime have not been factored in for simplicity – a thousand such doctors could be paid for the next decade. – © 2025 NewsCentral Media
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