Siyabonga Mkhwanazi
THE embattled South African Post Office (Sapo), which has become a hotbed for labour strife, hopes that Finance Minister Nhlanhla Nene will today throw it a financial lifeline as it scrambles to clean up its act and get back on a sustainable path.
Sapo administrator Dr Simo Lushaba told Business Report on the sidelines of a meeting with the portfolio committee on telecommunications and postal services yesterday that anything would be welcomed from the minister’s budget.
Sapo’s presentation to the committee hinted that the Post Office anticipated receiving as much R992 million from the sale of set-top boxes for television digital migration, but no further details were provided in this regard.
“If we get something, that would help,” Lushaba said, adding that they were trying to improve the business. Lushaba did not put down any figure, but stressed that any cash from the fiscus would boost the Post Office. Nene is scheduled to deliver his maiden budget speech this afternoon, and is expected to make key announcements around plans to stabilise some of the state’s major entities.
During its briefing to the portfolio committee yesterday Sapo said that threats of another strike by the Communication Workers Union (CWU) would cripple the organisation. A protracted strike last year added to Sapo’s woes as workers stayed off work for three months. The CWU announced last week that it could again go on strike if Sapo failed to meet its demands.
While Sapo suffered losses of R700 million in the past two years, the entity was expected to post a bigger loss of R1.3 billion in the financial year to March. Acting group chief executive Mlu Mathonsi warned that another strike would spell a disaster for the organisation.
Sapo’s customers wanted stability.
Lushaba said the entity was coming up with plans of getting out of the woods, including a turnaround plan. But no specifics were provided. He said he would give the turnaround plan to Deputy President Cyril Ramaphosa, who is overseeing Sapo, and Minister of Telecommunications and Postal Services Siyabonga Cwele before tabling it to the portfolio committee next month. Sapo was reviewing its revenue streams. It was difficult for it to operate in an environment where it still relied heavily on mail for revenue.
While the bulk of its revenue is from mail, over the last few years mail revenue has been declining. “Without strong revenue streams, Sapo will find it difficult to find its feet,” he said.
Diversifying revenue streams would help cushion Sapo. It could diversify by getting involved in logistics, financial services and e-commerce. This was what has happened in other countries like Italy, where the post office is strong on financial services. Lushaba said financial services was more than just about banking. Financial services can offer customised products for customers in branches located in the rural areas, for example. For now, all eyes are on Nene.