South Africa: Post Office Responds to Auditor-General Report

press release

The South African Post Office (SAPO) has taken note of the pronouncements by the AG, on the release of its 2019/20 annual financial results.

Indeed, SAPO's major challenges in the recent past, are well documented. These have come about as a result of a number of factors - both exogenous and endogenous - including an obsolete business model. These were exacerbated by the advent of the COVID-19 pandemic.

When considering the future of SAPO, it is worth noting its critical role in servicing the multitude of citizens who otherwise would not have access to critical basic services. Most of these are based in far-flung, remote rural, as well as the urban and peri-urban areas. The SA Post office fulfills a critical role in servicing the needs of the indigent - and indeed a large section of the populace, owing to its footprint in the lengths and breadth of the country.

SAPO has a dual mandate: fulfilling the accessibility needs, which carry a largely non-profit motive, while at the same time having to navigate the economic environment, to ensure its own survival and sustainability.

As last week was my first week in my role as Group CEO, I have spent most of the week engaging with the Ministry, the Board, EXCO as well as the Unions representative of our labour force. These engagements have exposed the massive opportunities (which outweigh the challenges) that SAPO will be tapping into to turn its fortunes around.

We continue to engage SAPO's creditors to acknowledge our indebtedness and willingness to honour the commitments. Equally, debt collection is a focus area.

The Minister is in the process of appointing a team of turnaround experts to work with the Board and the Executive team in the development of a bankable turnaround plan, in line with the requirements of the post-COVID-19 economy. We welcome this process, as it will allow the various teams to ensure the basics are in place - and improve on the matters flagged by the latest Audit report.

SAPO's opportunities include participating in the highly lucrative e-Commerce space, Digitisation of our processes, the courier space, as well as those activities which fall within SAPO's legal mandate (e.g. the distribution of parcels with a mass of up to 1kg).

We are confident that with the sense of urgency that now prevails in the organization, we are in the process of building a South African Postal service organization we can all be proud of.

SAPO is immensely proud of its role in nurturing the PostBank - amassing great value and goodwill in that asset.

In the long term, we are confident that we have the opportunity to build a world class, commercially viable postal service - with no heavy reliance on the national fiscus. However, in the short to medium term, we fully expect that the National government will support SAPO's efforts in dealing with these legacy issues.

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