President Cyril Ramaphosa has signed the South African Post Office SOC Ltd Amendment Bill into law, setting the stage for a significant transformation of the country’s postal service into a modern, multi-functional hub for government, business, and community services.
The new law expands the objects and mandate of the Post Office and enables its relevance and sustainability by including services that respond to the needs of users and customers.
“The expansion will ensure that the Post Office is not only empowered by the legislation to provide basic postal services but is empowered to provide other value-added services to expand on its revenue generating streams.
“The new law enables the Post Office to serve as a hub for government services and other agency services, and as a digital hub for businesses and communities,” the Presidency said in a statement on Wednesday.
This game-changing legislation redefines the mandate of the Post Office, enabling it to go beyond traditional postal services to offer a diverse range of value-added solutions.
The Post Office will also be able to serve as a logistics partner to other e-commerce providers – including small enterprises and informal traders - and any future business that the state-owned company may develop to serve users and consumers.
The law empowers the Post Office to continuously adapt its business model to stay relevant in an evolving technological landscape while enhancing its Universal Services Obligation.
It also prioritises partnerships with government institutions, which include national and provincial departments, national and provincial government components and municipalities, encouraging them to use Post Office infrastructure for efficient service delivery, reducing dependency on state funding, and unlocking new revenue streams.
“This aims to eliminate the company’s over-reliance on government funding and ensure efficient utilisation of post offices.
“The new law also addresses governance matters such as the size of the South African Post Office Board, the functions for the Board to deal with creditors and skills requirements for board membership,” the Presidency explained.
Financial distress
The South African Post Office (SAPO) was placed under business rescue in March 2023 as a result of severe financial distress.
This move followed years of declining revenue, operational inefficiencies, and an inability to modernise in the face of a rapidly changing postal and logistics industry.
At the time of entering business rescue, SAPO owed creditors a staggering R8.7 billion.
The decision to place the state-owned entity under business rescue was aimed at restructuring its debt and addressing operational challenges to prevent its complete collapse.
The financial woes of the Post Office stemmed from a combination of factors, including reduced mail volumes due to digital communication trends, mismanagement, and an over-reliance on government bailouts to sustain operations. Additionally, unpaid pensions, salaries, and other liabilities exacerbated the crisis, drawing criticism from unions and employees.
The business rescue process aimed to provide SAPO with an opportunity to stabilise, restructure, and develop a sustainable operational model.
This included exploring diversification of services, enhanced logistics capabilities, and becoming a central hub for government service delivery, a vision reinforced by the subsequent enactment of the SAPO Amendment Bill.
Revitalising the SAPO
The Congress of South African Trade Unions (COSATU) has welcomed President Ramaphosa’s assenting to the bill.
“This Act provides a viable path for a revitalised and repivoted South African Post Office (SAPO) geared towards ordinary consumers, in particular the poor and marginalised.
“This progressive Act provides a new mandate for the SAPO. It cannot rely upon posting letters in an era of e-communications. The Act enables a critical shift by expanding the mandate of the SAPO to include e-commerce, courier services, support for SMMEs and an enhanced partnership with the Postbank. It positions SAPO to serve as a multi-purpose access point where the public can apply for key government services,” said the union. -SAnews.gov.za
