Minister Gungubele upbeat about Post Office despite 17 years of plummeting finances

Minister of communications and digital technologies Mondli Gungubele is confident the South African Post Office (Sapo) can be profitable again despite several years of money struggles.

Business Day recently reported the entity was placed under provisional liquidation after a successful court application by a creditor owed money for rent. The Post Office has since settled the debt of the property company and is now seeking to solve the legal debacle. 

This week Gungubele appealed to the entity’s creditors and employees to be calm while he was dealing with the provisional liquidation problem.

The minister was optimistic the entity’s financial turnaround strategy, The Post Office Of Tomorrow Strategy, could make it profitable.  

“Sapo has developed an exciting and bankable strategy to transform the entity into a profitable business responding to the demands of this age and time. Granted an opportunity and the required support, Sapo will safely navigate the situation it is going through and become the desired digital services platform,” a statement from the minister read. 

This despite the entity’s finances plummeting for the past 17 years. According to the Post Office it last made profits in 2004 and the decline in its revenue started in 2006, about 17 years ago. 

Post offices in several suburbs have closed in recent years.

As part of its financial rescue measures, the Post Office turned to retrenchments last year. In February, it brought down retrenchments from 6,000 to 3,900, but CEO Nomkhita Mona said it was struggling to finance the retrenchments.   

In the 2023 budget the National Treasury allocated the Post Office R2.4bn. In a statement, the entity said it was positive the money would enable it to settle with some of its historical creditors. 

The DA is, however, not optimistic about the survival of the entity and wants it shut down nationally.  

Earlier this month, DA MP Dianne Kohler Barnard wrote to finance minister Enoch Godongwana to urge him not to give any more money to the entity.

“We stand firm in our belief that the Post Office, being one of the many bottomless-pit SOEs battling operational issues, is beyond repair and should be liquidated,” she said. 

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