The South African Post Office expects to lose about R391-million in 2026/2027, even after public funding, and is asking the state for about R2.2-billion in new money over the next three years to keep operating and start rebuilding its network.
The figures are in the Post Office’s corporate plan for 2026/2027, presented last week to the national council of provinces’ select committee on economic development & trade.
The request comes almost three years after government committed R6.2-billion to the Post Office’s business rescue, of which only R2.4-billion was ever paid. The second tranche, R3.8-billion for modernisation and for creditors still owed money, was never released.
In its medium-term expenditure framework (MTEF) submission, lodged in June, the Post Office asked for R4.1-billion over three years. Of that, R1.9-billion is its universal service obligation grant, which compensates it for keeping branches open where costs exceed revenue. The rest, about R2.2-billion, is money it does not currently receive:
- R1.05-billion in working capital
- R600-million for capital investment
- R509-million to settle what it still owes under the business rescue plan to the Post Office Retirement Fund (R259-million), medical scheme Medipos (R124-million) and the South African Revenue Service (R126-million)
Acting CEO Fathima Gany told the committee that the Post Office needed working capital because its efforts to diversify revenue were not moving fast enough, according to the Parliamentary Monitoring Group’s record of the meeting.
A shrunken modernisation budget
The Post Office says it needs R1.9-billion to modernise: R832-million for technology, R456-million for its vehicle fleet, R354-million to restore buildings and R244-million for mail processing. It has asked for R600-million, citing “the fiscal constraints currently being managed by national treasury”, and says it will seek partners to fund the rest. Its performance plan, however, records a baseline of zero partnerships with external parties.
Without the money, the presentation warns, “technology, logistics fleet and branch restoration do not proceed”, and deterioration continues.
The Post Office reported a net loss of R69-million for 2025/2026, its smallest in years. Its financial plan shows the loss was narrow only because of non-operating items. It spent R2.5-billion against income of R1.4-billion, and closed most of the R1.1-billion gap with R1-billion in non-operating items, which include public-service funding. Staff costs alone, at R1.4-billion, were higher than its total income.
The plan has the Post Office returning to a small profit of R21-million in 2028/2029, after losses of R391-million this year and R309-million next year. Getting there depends on income rising 45% in three years, to R2.1-billion. Courier and parcel revenue is forecast to grow more than tenfold, from R42.7-million to R447-million. Postal revenue, flat at R846-million for the past two years, is meant to reach over R1-billion.
Gany described the Post Office as no longer in intensive care but in “high care”, with cash its biggest risk. The exit from business rescue is stuck: the business rescue practitioners applied to end the process on 12 June, but the retirement fund is opposing the application, and settlement talks with Medipos are continuing. Gany warned that the Post Office’s cash was being depleted while the matter remained unresolved.
The Post Office has cut its approved network to 657 branches from about 1 100, with 258 designated as universal service branches, and its staff to 5 658 after 4 342 people left. It wants government to bring into force the 2024 amendments to its founding legislation, which would allow it to offer a wider range of services. Those amendments still await proclamation, according to the presentation.
Postbank wants R2.5-billion
Postbank, the Post Office’s former banking arm, also briefed the committee. It wants R2.5-billion through the same budget process: R2-billion in regulatory capital to support an application for a commercial banking licence, and R500-million for infrastructure such as its core banking platform and digital channels.
Board chairman Khaya Ngema told the committee that Postbank had been the Post Office’s largest creditor and had suffered the biggest loss when creditors were paid 12c in the rand.
Postbank swung from a net profit of R94-million in 2024/2025 to a net loss of R5.2-million in 2025/2026, according to its presentation. Non-interest revenue fell from R140-million to R60.4-million, against a target of R148-million, and deposits fell by 4%. Postbank blamed a “lack of channels and systems”.
The committee also asked about the status of Postbank’s agreement with Sassa, the social security agency, to pay social grants, and what it would mean for Postbank’s finances if the arrangement changed or ended. Sassa tried to end the agreement in September 2025, then extended it while an inter-ministerial committee considered its future. — © 2026 NewsCentral Media
