The South African Post Office (SAPO) is facing a net loss of over R2 billion this year, and its operational costs are almost double its revenue, according to Communications and Digital Technologies Minister Mondli Gungubele.
He said the state-owned enterprise needs another R3.8 billion bailout to avoid liquidation, which would affect millions of South Africans and many businesses that depend on its services.
Gungubele’s remarks came after creditors approved a business rescue plan for SAPO, which will be carried out in two phases over two to five years.
SAPO’s planned transformation
The plan aims to transform SAPO into a leaner and more efficient organisation, with fewer branches and employees, more digital products and services, and strategic partnerships in the e-commerce and logistics sectors.
The first phase will focus on stabilising the business by cutting down the branch network from 1,023 to 600 and the workforce from 9,000 to 5,000.
The second phase will implement the ‘Post Office of Tomorrow’ strategy, which will diversify and expand the services offered by SAPO in a modern world.
Business rescue practitioners Anoosh Rooplal and Juanito Damons said the plan will improve service delivery levels, increase revenue streams, and future-proof the organisation.
They said a restructured Post Office will also contribute to the financial sustainability of many large and smaller businesses, the tax-paying base, and employment growth.
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