Meltdown at South African Post Office

The South African Post Office is experiencing a meltdown with branches unable to serve clients, service providers not being paid, and mass branch shutdowns.

In April this year, Auditor-General Tsakani Maluleke revealed that the South African Post Office is commercially insolvent.

Maluleke said that over the 2019/2020 financial year, the Post Office incurred losses of over R1.7 billion while its liabilities exceeded its assets by R1.5 billion.

The dismal state of the SA Post Office finances is clearly seen in the state of its branches and the way its employees and partners are treated.

MyBroadband visited numerous Post Office branches in Gauteng, and many of them had signs about service delivery problems in their windows.

One branch has not had electricity since the beginning of 2021. It is because the Post Office did not pay the landlord, who then disconnected their power.

“Office closed until further notice. We only assist [with] parcel collections between 08:30 to 13:00,” a message on the branch window says.

Another Post Office said vehicle license services were offline. “Please go to the nearest Post Office”, a message in the branch window said.

Post Office Close

Post Office employees have informed MyBroadband that pension fund deductions are taken from their salaries but that these deductions are not paid into these pension funds.

This problem, one SA Post Office employee told MyBroadband, has been happening since last year.

The employee said they tried to get feedback from the SA Post Office about their pensions, but they are ignored.

It is not only employees who are struggling. Many landlords and service providers are struggling to get money from the Post Office.

In March, Business Day reported that the Post Office had unpaid invoices totalling R638 million.

It admitted that it is battling to pay its creditors and is servicing debt according to a priority schedule.

Another problem is that postal agents across South Africa are not getting paid by the SA Post Office for their services.

These postal agents handle mail on behalf of the Post Office, for which they are paid a small fee.

One agent told Carte Blanche they had not been paid for months which makes it difficult for them to continue operations.

Nomkhita Mona
SA Post Office CEO Nomkhita Mona

South Africa Post Office CEO Nomkhita Mona admitted that they are unable to pay postal agents and could not commit to when they will be paid.

“Some of them have reached out to my office because we have not been able to pay. It is because the financial situation of the Post Office is really a bit bad right now,” she told Carte Blanche.

“We are careful not to give a date on when we will pay because we really don’t know.”

Mona blamed the Post Office’s dire financial situation on an outdated business model and the impact of the Covid-19 pandemic.

She said they had launched numerous initiatives to turn the company around, which include modernising its operations, digitising the business, and ramping up its ecommerce operations.

The South African Post Office is also permanently closing 130 branches across the country to save costs.

These plans are, however, nothing new. When former CEO Mark Barnes took the reins in January 2016, he punted the digitisation of the Post Office and making it a big ecommerce player.

“We are looking at ecommerce businesses, and we are looking at ensuring that we digitise the Post Office so that we can run these ecommerce businesses,” former telecoms minister Siyabonga Cwele said.

In November 2016, the Department of Telecommunications and Postal Services discussed ways to modernise the postal network to benefit from ecommerce.

Five years later, the new Post Office CEO is saying the same things Barnes said when he became chief executive.

Why Mona believes things will be different this time around is not clear.

MyBroadband asked the SA Post Office for comment, but the company did not respond by the time of publication.

Now read: SA Post Office’s plan to block all courier deliveries under 1kg

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Meltdown at South African Post Office