Big changes for the South African Post Office one step closer

The Department of Communications and Digital Technologies has gazetted its intent to table the South African Post Office Amendment Bill (2022) before the National Assembly.

This is the next step in getting the bill adopted and enacted into law, which would see the SAPO’s mandate change, allowing it to expand its services and offerings, particularly in the e-commerce and courier space.

According to the department, the bill’s main aim is to expand the mandate of the South African Post Office, and repurpose the SAPO infrastructure to provide diversified and expanded services.

It said this will be done by exploiting the group’s current infrastructure capacity to extract value and forge partnerships with other stakeholders.

The proposed laws will also revise the governance structure of the SAPO by establishing, appointing and detailing the functions of a Stamp Advisory Committee and to provide for matters connected with it.

Some of the more notable proposed amendments include:

• SAPO providing logistics and e-commerce services and serve as a logistics partner for e-commerce and other logistics players, including SMMEs and informal traders;
• SAPO serving as a digital hub for businesses and communities;
• SAPO providing different services at the post office and service points based on the needs assessments for a particular area and to ensure the effective usage and enhancement of the retail offering and services – and charging different fees for different services and areas, subject to the approval of the Authority.

The Post Office will also be allowed to continuously adjust its business model in line with the technological and industry developments in the provision of postal services and other services – including the roll-out of service points and the use of third-party infrastructure and other related services subject to the approval of the minister in charge.

Among the amendments, the bill also aims to address the Post Office’s financing problems.

Sapo’s financial situation is dire, with liabilities outweighing its assets by R4 billion and debt of R8 billion. In the latest 2023 Budget, National Treasury announced the SAPO would get another bailout of R2.6 billion from government coffers. This follows years of bailouts and bailout requests.

Meanwhile, the group said it has been left with no choice but to retrench some 6,000 people – 40% of positions – due to its financial constraints. It noted that the wage bill makes up 68% of its costs, and its business has become unsustainable due to private courier companies encroaching on its services and the government itself steering clear of using it.

In the proposed laws, government institutions – which include national and provincial departments, national and provincial government components and municipalities – will be encouraged to use service offerings by Post Office and its infrastructure in the delivery of their services.

They will also be encouraged to set aside certain services to be provided by the Post Office – all in a bid to assist in eliminating the group’s over-reliance on government funding.

Postbank

The SAPO Amendment Bill isn’t the only important piece of legislation making its way through government processes.

The Postbank Ltd Amendment Bill is also currently being processed, with the aim to turn the SAPO spinoff into an independent business and, once the necessary licencing has been issued, to become a fully-fledged state bank.

According to president Cyril Ramaphosa by passing, enacting and implementing the bill, Postbank is already reviewing its service offerings to provide a viable and affordable alternative to the commercial banks.

He said that the bank would seek to provide an affordable alternative to commercial banks that often turn citizens away as they lack collateral.

Minister of Communications, Khumbudzo Ntshavheni, presented the bill to the National Assembly in May 2022.

The bill amends the South African Postbank Limited Act by adding and modifying definitions, enabling Postbank to operate independently from the South African Post Office (SAPO).

The bill would facilitate the transfer of Postbank’s shareholdings from SAPO to the government and establish a Bank Controlling Company (BCC) as a holding company for the bank.

Read: New laws coming to South Africa in the next few months