South African Post Office
by Thabo Mosia
South Africa’s state-owned postal service, the South African Post Office (SAPO), is taking bold steps to overcome years of financial woes and adapt to a changing world. The government has issued a Request for Information (RFI) to attract private sector partners, aiming to inject fresh ideas, funding, and efficiency into the struggling entity. This move is a key part of SAPO’s business rescue plan, which seeks to build lasting income sources while enforcing its legal right to handle small parcels. With branches across the country and a vast network, these efforts could turn SAPO into a modern hub for logistics, digital services, and government support, benefiting millions of South Africans.
SAPO’s Long Battle with Financial and Operational Challenges
For years, SAPO has faced tough times, relying heavily on government bailouts to stay afloat. The entity has received billions of rands from the state, but ongoing losses, outdated systems, and a shift away from traditional mail have pushed it to the brink. Business rescue proceedings began around mid-2023, lasting about two years and costing over R250 million. During this period, SAPO closed branches, let go of workers, and streamlined operations to cut costs.
The rescue process has shown some progress, with monthly reports from January 2023 to September 2025 detailing steps taken. These include restructuring, asset reviews, and projections for income, expenses, and cash flow. For example, by the end of February 2025, SAPO had fielded 59 unsolicited partnership offers, covering areas like digital services (22 proposals), infrastructure (10), financial services (2), and logistics (10). However, business rescue practitioner Anoosh Rooplal called many of these “very lopsided,” warning that SAPO must avoid deals that exploit its resources without fair returns.
Minister of Communications and Digital Technologies Solly Malatsi has stressed that SAPO cannot depend forever on public funds. He said, “The Post Office could not permanently rely on the state for its survival and ‘needs to embrace private partnerships which could leverage its strengths, including the size and depth of its infrastructure’.” He added, “The future is around private partnerships.” This reflects the need for SAPO to evolve from a basic postal service into a hybrid provider of logistics, digital platforms, and more.
Launch of the RFI: Inviting Private Sector Input
On 13 November 2025, the Department of Communications and Digital Technologies released the RFI to explore partnerships that could breathe new life into SAPO. This is part of the turnaround strategy to boost innovation, strengthen infrastructure, and widen service delivery. The RFI invites ideas on technology, platforms, physical assets, operating models, and added services like postal operations, digital tools, financial inclusion, and government access points.
Interested parties can submit proposals covering revenue-sharing deals, joint ventures, build-operate-transfer setups, infrastructure leases, or managed service contracts. These could help modernise SAPO’s over 1,200 branches into multi-purpose centres for services and financial access, especially in underserved areas. A briefing session is set for 10 December 2025 in Pretoria to guide potential partners. The RFI document and related market research are available on the department’s and SAPO’s websites.
DA MP Nicolaas Pienaar hailed the RFI as “most exciting news,” noting that private involvement is vital for SAPO’s success. A task team, including SAPO, National Treasury, and the department, will review options and seek alternative funding to ensure deals bring real value.
Progress in the Business Rescue Plan
SAPO’s business rescue plan, adopted in November 2023, focuses on creating sustainable revenue while exiting the process smoothly. The plan includes detailed annexures on group structure, property valuations, asset registers, creditor lists, financial projections, and liquidation scenarios. Most court conditions have been met, and business rescue practitioners are preparing to step back soon.
To avoid a leadership gap, the department is appointing a new board. Minister Malatsi explained that a selection panel has been finalised to interview candidates, with recommendations going to Cabinet. He said, “We don’t want that day to arrive before we have finalised the appointment of the Post Office board.” The focus is on partners with skills in e-commerce, digitalisation, and warehousing to drive long-term viability.
Malatsi added, “The reality is that any considerations about prolonging the sustainability of the Post Office mean that we have to look with an open mind at prospects of attracting sustainable private investment.” This shift aims to reduce reliance on government funding amid fiscal pressures and sector changes.
Push to Enforce Monopoly on Small Parcels
Alongside partnerships, SAPO is fighting to protect its legal monopoly under the Postal Services Act of 1998. This gives it exclusive rights to reserved services, including parcels under 1kg—a key area for online shopping deliveries. Business rescue practitioners propose that the Independent Communications Authority of South Africa (Icasa) fine competing couriers and direct the funds to SAPO.
SAPO is in court against groups like the South African Express Parcels Association, Takealot, and PostNet, challenging Icasa’s rules interpretation. During a February 2025 oversight visit in KwaZulu-Natal, discussions highlighted how securing this monopoly could boost income. Portfolio Committee member Sibongiseni Vilakazi noted, “There was an animated discussion on income generation, with many in attendance believing it is possible for Sapo to generate sufficient income to sustain itself.”
However, Minister Malatsi announced in March 2025 plans to review this monopoly, with outcomes still pending. This could open the market but risks SAPO’s revenue if not handled carefully.
