Post Office on Life Support: What Losing R2 Billion Means for South Africa’s Struggling Mail Service

First it was crumbling buildings and vanishing parcels. Now, the South African Post Office has officially kissed R2 billion goodbye, and with it, much of its shot at a full recovery.

This week, Parliament was told in no uncertain terms: the Post Office will not be receiving the remaining R3.8 billion it was promised as part of a court-approved business rescue plan. That money, meant to plug holes in operations and pay off debt, has been taken off the table.

Instead, the Department of Communications and Digital Technologies will have to make do with just R1.8 billion over three years, and not from Treasury, but from its own limited budget.

The bailout that never came

The story starts in early 2023, when the Post Office, already limping along, faced the threat of liquidation. Then-Minister of Communications Mondli Gungubele confirmed that Cabinet ordered the entity into business rescue to avoid total collapse. A court agreed, on one condition: the rescue plan needed to be fully funded.

That meant adding R3.8 billion to the R2.4 billion the Treasury had already allocated. But as Gungubele put it this week, “We could not extract money from Treasury… the bottom line is the fiscus could not afford it.”

That funding was critical for three things: paying creditors, upgrading old infrastructure at Post Office branches, and injecting working capital to keep the lights on. Without it, business rescue practitioners say they’ve had no choice but to place the Post Office in “austerity mode.”

Treading water until November

The result? Bleak. The Post Office is now scraping by with just enough money to operate until November 2025. By then, it must come up with R520 million to settle outstanding debt, with no bailout in sight.

Anoosh Rooplal, one of the two business rescue practitioners, told Parliament that this R2 billion gap is not just a budget problem. It is a warning sign.

That R3.8 billion would have allowed them to settle debts at 18 cents to the rand, stretch the organisation’s lifespan, and rebuild infrastructure that hasn’t seen meaningful investment in years. Without it, they’re running out of runway fast.

The new plan: do more with less

While the original rescue plan is on ice, a more modest attempt is still in motion. New Communications Minister Solly Malatsi announced that R1.8 billion will be given to the Post Office across the next three years, taken from the department’s own budget. That funding will go toward service delivery improvements, meeting universal service obligations, and exploring partnerships.

There’s now talk of “rebuilding trust” and “diversifying revenue,” but these are long-term goals. Short-term survival remains the bigger concern.

A slow road to profit?

Post Office acting CEO Fathima Gany says the entity still has ambitions to break even by 2027 and post its first small operating profit in 2028, just under R600,000. By 2029, the company projects a full turnaround, with potential profits exceeding R1.5 billion.

To get there, it plans to drastically shift its business model. Today, 45% of revenue comes from traditional postal services. By 2029, that number is expected to drop to 28%, with digital channels and courier services making up the difference.

• Postal services: 45% (2024) → 28% (2029)

• Financial services: 17% → 8%

• Courier & parcel services: 2% → 28%

• Digital platforms: 3% → 20%

These are ambitious targets, especially for a business that might not survive beyond spring unless a serious cash injection arrives.

Social reaction: “Just close it already”

On social media, many South Africans seem less optimistic than the Post Office itself.

X (formerly Twitter) is filled with frustration: “When last did anyone even go to a Post Office?” and “This is a slow funeral at this point.” Others argue the money should be used to fix services people still depend on, like Home Affairs or healthcare.

Some users point out that while digital platforms are part of the future plan, most Post Offices still can’t even process card payments or offer basic tracking. One user summed it up: “Trust was lost years ago. Now they’re asking us to believe again?”

The bigger picture

The Post Office’s story is not just about mail. It is a reflection of the larger dilemma facing many of South Africa’s state-owned entities: a widening gap between what’s needed and what’s possible under strained public finances.

Whether this is a comeback story or a drawn-out collapse will depend not just on money, but on political will, execution, and the trust of South Africans.

Right now, the countdown to November is ticking.

Also read: Afrihost Tops the Charts Again: South Africa’s Best Internet Providers Ranked in 2025

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Source: MyBroadband

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