South African Post Office gets R1.8 billion, not promised R3.8 billion
SAPO Faces Budget Cut as Government Trims Rescue Funding Plan
The South African Post Office (SAPO) will not receive R2 billion ($112 million) in promised government funding intended to help the entity emerge from its financial crisis.
Instead, the Department of Communications and Digital Technologies (DCDT) will allocate R1.8 billion over three years from its Medium-Term Expenditure Framework (MTEF) budget. The funding will support the post office’s mandate to provide universal services and improve service quality.
“This funding will aid SAPO’s efforts to diversify revenue, rebuild trust, and stabilize operations through strategic partnerships and effective governance,” said Communications Minister Solly Malatsi in Parliament.
The government’s financial support aligns with SAPO’s turnaround plan, which aims to achieve R568,860 in operating profit by 2026 and break even by 2027. By 2029, the Post Office targets R1.5 billion ($84 million) in profit.
Savings and service changes
To achieve this, SAPO will cut costs and expand into new service areas. In 2024, 45% of its revenue came from postal services, 17% from financial services, 3% from digital channels, and 2% from courier and parcel services.
By contrast, by 2029 SAPO plans to reduce reliance on postal (28%) and financial services (8%), while increasing courier/parcel (28%) and digital services (20%).
The Post Office faced liquidation in 2023 and submitted a financial rescue plan seeking R6.2 billion in support. Of this, R2.4 billion was approved via court ruling and used for working capital, infrastructure upgrades, and partial debt repayment at 18 cents per rand owed.
SAPO also hoped to receive the remaining R3.8 billion, but the budget could only cover R1.8 billion.
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