How private institutions replaced poor government services in South Africa

Mark Barnes has taken over as CEO of the South African Post Office, with his five-year term starting on 15 January 2016.

His appointment came shortly after the government launched its turnaround process at the Post Office, which has been struggling to pay staff.

Barnes said privatisation is not an option to turn the Post Office around, and that it is possible to make the institution a “viable business-connected business”.

He explained the Post Office should move away from relying on delivering mail to make money, and build a diversified business model.

He told Business Day that it can “embrace e-commerce, become an investment facility, a delivery agent of chronic medicines, educational materials and social grants, and develop computer service centres for local communities”.

Barnes is confident that with the Post Office’s extensive infrastructure, it can compete in the local market.

A parallel economy has developed, with private services

One of the biggest challenges for the Post Office is competition from well-established private services, which have taken over the functions of the Post Office for many South Africans.

The Post Office is not alone in this regard. Speaking to eNCA’s Siki Mgabadeli, Barnes said a parallel private economy has developed in South Africa – where private institutions offer superior services to the government’s offerings.

He gave examples of healthcare, education, security, and power, where more affluent South Africans opt for private services rather than cheaper or even free government offerings – as detailed in the infographic below.

How private institutions replaced poor governments service

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How private institutions replaced poor government services in South Africa