It is one of South Africa’s oldest businesses, dating back to 1792, when two Dutchmen opened the country’s first post office in a small room next to the pantry at the Castle of Good Hope.
Today, go to most post offices in the country and you’re likely to find a dust-covered building that hasn’t changed in decades. Rusted postboxes line the walls outside, while yellowing, framed posters hang askew on the walls inside.
Often, there is one lone worker on duty, positioned in front of an old computer monitor.
The South African Post Office is emblematic of what has happened to so many state-owned entities (SOEs). Felled by years of rising debt, financial mismanagement and crushing staff costs, it has been on the brink of failure for more than a decade.
The deeper problem is that the Post Office simply isn’t relevant to the average South African today. It has been ruthlessly outdone by private operators such as PostNet, Postlink and DHL. These rivals deliver on time, and reliably.
By contrast, there is a good chance that if you trust the Post Office with your letter, it won’t get there.
Its 2025 annual report revealed that it was able to “process and deliver customer items as per the regulated standard” in only 62% of cases — far below the 92% expected. It was just as bad with courier items, where it met the standard just 69% of the time.
The reasons given were depressing. “Shortage of postman [sic] in certain areas. Postman [sic] have to be moved from depot to depot to assist to clear the mail,” it recorded.
For a business whose sole job is to deliver post, it is an indictment that only two out of three parcels or letters make it. This deficit is even more pronounced in the digital era, where it hasn’t diversified enough.
In 2025, the Post Office met hardly any of its operational targets. For instance, due to “austerity measures”, it was unable to replace any of the “very old hardware” by buying new scanners, laptops or motorbikes needed to do its job. It was the same with software.
Nor did it meet its goal of addressing within 14 days the 2,402 complaints it had received. This was in part because there were “no creditable systems at the call centre to track incoming calls and … complaints”.
It’s little surprise then that the Post Office came close to being liquidated in February 2023, after failing to be revived by three CEOs and an estimated R16.5bn in taxpayer money.
However, in an eleventh-hour “Hail Mary” intervention, the government placed it in business rescue instead, arguing it could survive if given the time and space to implement a turnaround.
In June this year, business rescue practitioners (BRPs) Anoosh Rooplal and Juanito Damons filed an application for the Post Office to finally exit business rescue. Quite what has changed in the past three years isn’t clear.
Not that you’d think so if you talk to Fathima Gany.
The acting CEO of the Post Office gushes about the improvements in recent years, saying that “where the real value comes in” from business rescue is how the BRPs have “rightsized the business”.
She lists them as going through a retrenchment process, during which 6,000 jobs were cut, and a branch “rationalisation” where 366 Post Office branches were shut down, leaving just 500 operating. Of those 500, about half are “universal service obligation” branches, which have to operate regardless of how profitable they are.
These hardly sound like wins, but Gany insists this has been necessary for survival. Maybe — but is it worth keeping the Post Office alive when it is clearly out of date and little more than a sinkhole for state funds?
What, in other words, would we lose?
Nothing going on but the rent
If the Post Office wasn’t such a drain on the fiscus — having swallowed an estimated R16.5bn in the past 15 years — maybe there would be less uproar.
First, it has received R10.3bn in bailouts since 2014, much of it just to keep the lights on and pay salaries. Then it got another R2.4bn as it went into business rescue. And in September 2024, it asked for another R3.8bn as an “investment”.
The National Treasury hummed and hawed before deciding to withhold the funds. It has been unwilling to budge, denying it has any legal responsibility to recapitalise the Post Office.
Sonja Boshoff, chair of parliament’s select committee on economic development & trade, said the Treasury had never committed to providing funding.
“The absence of a credible, implementable turnaround plan, together with prolonged business rescue processes that have focused on closures and retrenchments rather than operational recovery, has materially weakened the financial and operational position,” she said.
Rooplal and Damons fumed that this was inaccurate, saying that “the R3.8bn figure originates from funding commitments that were referenced in the [communication minister’s] application for business rescue”.
They said Boshoff’s view “does not reflect achievements made during the business rescue to restore financial and operational stability”.
Even though the BRPs have filed to extract the Post Office from business rescue, Gany says it will not be able to move forward without a further capital injection from the government.
Whatever the figure, the Post Office “will need an investment in its business to get it fit for purpose”, she says.
The need for yet another bailout — for an entity where the prospects seem dim at best — is likely to only raise public ire more.
But Gany says this bailout need not be from the government only.
“It could be government funding, it could be through a public-private partnership, or if we get the PFMA [Public Finance Management Act] exemptions, we could raise funding at the back of the balance sheet,” she says.
The point is, the Post Office can’t survive on its own steam.
Mark Barnes, a former CEO of the institution, agrees there is no way forward without this capital injection. He argues, however, for the “need to understand the composition of this R3.8bn funding requirement and whether it would meet investment criteria, rather than bailout criteria”.
“Would that investment withstand objective investment scrutiny? That’s the question. And if it does, you’ll get the money from anywhere.”
Evidently, the Treasury doesn’t believe it would pass the test.
But Gany says the Post Office, in looking for a partner, has found some success with the private sector.
“The shareholder, together with the Post Office, went to market in December [2025] for requests for information, and it has had good traction,” she says. It has shortlisted 97 businesses from which it is now asking for requests for a proposal.
For a private company, the problem is that the Post Office doesn’t just have undiluted commercial imperatives. The difficulty, Barnes says, is to “marry the social imperatives with the financial investment attractiveness — you have to get those two purposes to live side by side”.
Gany agrees that the only way to carry the heavy cost base of the social mandate is to have “a commercial mandate” and focus equally on delivering a profitable business and a social service.
For now, the fact remains that the Post Office is still severely in the red and cannot do anything about fixing itself until it can find more money.
The trajectory isn’t bad, though: the amount owed to creditors has fallen from roughly R8.7bn to R440m, and its net loss for 2026 narrowed to R71m from R514m. But the spine-chilling bottom line is that the Post Office hasn’t turned a profit in 13 years.
“We are very mindful that we are not a normalised operation just ready to make decisions without considering cash flow,” Gany says.
But she argues that the executive team isn’t entirely hamstrung. Before, she says, there was always an excuse for why the Post Office was distressed, but there is a newfound sense of agency at the organisation.
Today, she says, the team members ask themselves: “What can we do as a management team that is within our control? We’re not having a pity party any more; we’re actually going to think about what we can do.”
Besides delivering post, it added a new string to its bow a few years ago by offering the ability to renew car licences from Post Office branches. Now it will allow people to pay traffic fines too, and it has partnered with the new lottery operator to sell tickets — both of which will give it more income.
The way forward, Gany is clear, is to build: “You cannot downsize the business any further, you cannot close any further branches because then you just don’t have an entity.”
Losing the last mile
To many on the outside, it might be too little, too late to save it from irrelevance.
The digital revolution rendered letters redundant decades ago, and the courier and parcel industry has left the Post Office in the dust. There are so many rivals: PostNet, The Courier Guy, Paxi, RAM, Aramex … the list goes on.
Gany argues that these aren’t competitors to the Post Office, as its main service is its social mandate — its universal service obligation. But if that is true, it means the Post Office’s only remaining real business turns absolutely no profit.
“Those private businesses predominantly operate in urbanised places,” she says. “One of the intangibles on our balance sheet is our ability to touch 98% of South Africa, whether we’re delivering mail or a courier parcel. So we remain relevant in that space.”
This argument might have held water 10 years ago, but it is no longer the case, says political analyst Ralph Mathekga. In the rural area where he lives, he sees courier drivers passing by every day — and not one Post Office worker.
“When they had that reach, it is then that they should have undertaken ways in which they could [expand] that reach in negotiation to allow couriers to go there through them,” he says.
Today, however, the Post Office “is no longer in the position where it can adapt”, Mathekga says. “The market has left it far behind.”
And just as the reach of the Post Office is decreasing as it closes branches, its rivals are expanding. PostNet now has 515 stores countrywide, with locations as rural as Sterkspruit and Kuruman. And that doesn’t even begin to compete with Pep’s Paxi service, which operates out of the 2,715 Pep stores nationwide, many in small towns.
The success of private couriers has been hard to deny, and while ANC government officials might refuse to admit to this, others are more willing.
In December, communications minister Solly Malatsi, appointed from the DA, dealt a blow to the Post Office in favour of the private sector when he officially ended its 25-year monopoly on the last-mile delivery of parcels under 1kg.
This rule was initially put in place to ring-fence certain lucrative services for the Post Office to make them more affordable for the public. But given that the Post Office has been unable to deliver efficiently, this rule became more of a hindrance than a help.
Takealot and PostNet fought the government in court to have this monopoly scrapped and have been delivering parcels of less than 1kg for years, regardless of that rule.
Thanks to Malatsi, that battle is effectively over. It means private couriers now have the legal right to compete in the last area where the Post Office had some advantage.
Old dog, old tricks
Gany and analysts agree that while mail services worldwide have become less relevant, some post offices globally have changed their models to remain sustainable.
“The mail business globally has got a declining trend, [but] when you benchmark us to our peers in First World countries, they’ve diversified ahead of time so they mitigated their risk,” she says.
Economist Dawie Roodt points to perhaps the best example of this diversification: Deutsche Post. The German mail service began buying shares in international courier service DHL in 1998 and completed its 100% acquisition in 2002.
Today, the DHL group operates as a publicly traded, multinational operation while still being responsible for Germany’s main mail delivery service.
Equally, the Japan Post Group bought Australian freight and logistics firm Toll Holdings in 2015, which allowed it to become a global delivery giant reaching into 55 countries. And France’s La Poste Groupe established its own logistics brand, Geopost, which today has Europe’s largest parcel delivery network, delivering more than 2-billion parcels a year.
But in South Africa, the Post Office’s inability to evolve beyond its traditional role has torpedoed any hope of competing with private couriers.
“If they cannot even master the basics of providing a very outdated service, it is a far cry [to believe] they could make the necessary leap to become relevant now,” says Mathekga.
He points out that it used to be a universal service obligation for another SOE, Telkom, to provide public payphones — but these services have been phased out with the rise of mobile phones. Should the same not happen here?
The Post Office is having its lunch stolen elsewhere too.
It once held the monopoly on distributing welfare grants for the South African Social Security Agency (Sassa) but had to relinquish that role in 2023 due to its consistently offline systems. “Private entities such as Shoprite are doing a better job at distributing that, and it is becoming more and more decentralised now,” says Mathekga.
Today, the only service for which people might still go to a Post Office is licence disc renewals. However, even here it struggles. “If the government passed legislation that said PostNet and other private entities could do that, people [would] not return to the Post Office,” says Mathekga.
Despite manifest signs of its inability to compete with any sort of proficiency, the government is clearly “unwilling to let go” of the Post Office, he says.
Mathekga argues the government is simply trying to keep it going so that it can “continue to employ people”, but the damage to the institution is obvious. “The government will not announce they have failed, but the evidence is there.”
And a legacy bank too …
The Post Office’s rot extends beyond its mail and courier service. Though it’s now a separate entity, the epic failure of Postbank is a direct consequence of the Post Office’s creaky machinery.
Established more than 200 years ago, Postbank was initially a government-owned savings bank that became a transactional bank in 2010, through which it distributed Sassa grants. It was formally separated from the Post Office in 2023, but it took with it the legacy systems that were never built to sustain a modern bank.
The argument in favour of Postbank was its huge footprint of Post Office branches, where transactions could be done. But in today’s banking world, fee-free online banking is increasingly the way to go.
“I can’t see how there is a future for Postbank,” says Roodt. “Imagine them trying to compete with [GoTyme] or Bank Zero; I mean, there’s no way they will be able to do that.”
In the world of fast-innovating banking fintech, Postbank looks like an anachronism, operating mainly out of retail outlets and from Standard Bank ATMs since May 2026.
While other banks have complicated fintech ecosystems and are dabbling in the use of cryptocurrencies, “Postbank can’t even open a banking app — they are so, so far behind”, Roodt says.
His view is that Postbank should simply be shut down and stripped.
Roodt says some parts could be sold easily enough, since “financial services companies would be really interested in [the] banking licence”, though “they wouldn’t be interested in the existing infrastructure [or] people”.
‘Already DOA’
The question at the heart of it is: can the Post Office, dysfunctional and irrelevant, with no real prospects for future capital injection, be revived?
Gany is positive about its prospects, as you’d expect, pointing with pride to the Post Office’s latest feat: its first unqualified audit opinion in six years.
For years, it suffered from disclaimed audit opinions due to a lack of coherent information about its financials.
“Management spent a lot of time trying to get up to date with five years of audits,” Gany says. “But, you know, when you’ve had staff attrition, you’re losing institutional knowledge, documents get lost, you move offices, so you are really backlogged.”
This unqualified audit, she says, will hopefully restore public confidence.
“In an organisation that has experienced prolonged financial and institutional distress, restoring that level of financial discipline and accountability matters,” she says. “People can now place reliance on our numbers, so whether we’re talking public-private partnerships or even to raise funding, now we have a balance sheet you can actually place value on.”
Barnes is less convinced this should be seen as a win. “An unqualified audit is a requirement, not an achievement,” he says.
That’s a fair assessment for most companies, where an unqualified audit is akin to having clean fingernails — important, but not necessarily impressive or noticeable.
But this is an SOE, and most of the Post Office’s peers haven’t seen an unqualified audit for years. Auditor-general Tsakani Maluleke says 88% of the public expenditure budget sits in the hands of enterprises that did not receive clean audits this year.
Independent analysts say that despite this unqualified audit, there is no real hope for the revival, or even survival, of the Post Office.
When asked if anything can be done to fix the institution, Mathekga is bleak.
“The cost will be too high, and it will be too great a leap for them to fit into the current industry,” he says. “In my view, they have already died a natural death.”
Roodt agrees. “There’s absolutely nothing they can do that the private sector is not already doing and doing very well.”
In Roodt’s opinion, the ship to save the Post Office from irrelevance sailed years ago; trying to catch the next ship will be a waste of time and taxpayer money.
“I don’t think the question is, can something be done to save it? I think the remaining question is, how can we wind it down as well as possible without too much pain?”
To him, this looks like putting the Post Office’s assets up for a fire sale. Its hundreds of properties would likely garner a decent amount of money, but its few remaining assets would be unlikely to fetch much.
It seems unlikely that the government will do this any time soon. It would be too much of an own goal to admit to the Post Office’s total failure and would likely only bring on the ire of organised labour and the remaining 6,000 employees.
Yet its failure is evident in the 20,000 employees working for private courier firms, who are doing a far better job without using taxpayers as a crutch. The question remains: is the government willing to see the facts as they are, or only as it wishes they were?
