The South African Federation of Trade Unions (SAFTU) has raised alarm over the impending liquidation of the South African Post Office (SAPO), as government plans to cease financial support for the struggling state-owned entity.
Story Summary:
- The South African Federation of Trade Unions (SAFTU) is urgently calling for government intervention to prevent the liquidation of the South African Post Office, citing potential job losses.
- Finance Minister Enoch Godongwana has withheld further bailouts for the Post Office, stating a “tough love” approach to financially struggling state-owned enterprises.
- Alternatives like privatisation or seeking private investments are being considered to manage the Post Office’s debt and operational challenges.
SAFTU ‘devastated’ by Post Office liquidation
Speaking on VOC’s News Beat, SAFTU’s Media Officer Mogoshadi Maserumule expressed deep disappointment, saying the closure would be catastrophic for SAPO’s nearly 5,000 employees and their families.
“We are devastated,” said Maserumule, calling the situation both “embarrassing” and “devastating” for a fully democratic country unable to maintain a functioning public postal service.
The financial trouble facing SAPO has been mounting for years, with successive bailouts unable to secure long-term stability.
The post office, which was placed under business rescue in 2022, now needs a further R3.8 billion to continue operations, a demand the government has struggled to meet.
The first bailout tranche of R2.4 billion was allocated a year ago to kickstart the business rescue process, but with SAPO still facing a shortfall, the question of ongoing government support remains unresolved.
Finance Minister Enoch Godongwana’s recent medium-term budget policy statement echoed a firm stance on state-owned enterprises (SOEs) like SAPO, with the minister announcing that no additional funds would be set aside to support them.
“We need to give tough love to these SOEs,” Godongwana said.
“There’s no money in the adjustments, and constantly funding underperforming entities means underfunding essential services elsewhere.”
Since 2008, the South African government has provided over R520 billion in bailouts for SOEs, including Denel, Transnet, and the Land Bank.
Godongwana argued that these bailouts have drained resources from other critical national priorities.
He also disclosed ongoing discussions with the Department of Communications, which oversees SAPO, about finding alternative funding options.
Godongwana suggested private sector partnerships or using departmental savings to bridge SAPO’s funding gap, although the final decision rests with the communications department.
