Government wants answers about Post Office liquidation

South Africa’s government has requested more information from the state-controlled post office about financial problems that threaten its survival.

Minister of communications Mondli Gungubele said he wants SAPO, as the postal system is known, to provide him with a detailed account of its difficulties with a view to helping the agency transform into an “independent and profitable business,” he said in a statement on Sunday.

The South African Post Office was placed under provisional liquidation this month after a creditor went to court to recover back rent. It’s since paid off the debt and may approach the courts to remove the order.

SAPO is also struggling to pay employees benefits, and announced plans in January to reduce working hours and lay off staff in a bid to cut wage costs, which account for 68% of its total spending.

“All necessary steps will be taken to ensure continuous provision of social services, timely grant payments, an efficient workforce, and harmonious negotiations with SAPO’s creditors towards favorable outcomes,” Gungubele said in the statement.

Finance Minister Enoch Godongwana said in January that a regulatory framework is being developed to use the post office as a vehicle for a proposed state bank.

The following month, he announced that the company would receive R2.4 billion  from the National Treasury this year to help implement a turnaround plan.

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Government wants answers about Post Office liquidation