South Africa

Former South African Post Office boss on how the business can be saved

Former chief executive officer of the South African Post Office, Mark Barnes says that a private sector partnership with the government can revive the country’s postal service.

“There is a groundswell of private sector eagerness, waiting to partner with government,” Barnes said in an interview with ENCA this week.

In September 2021, Barnes tabled a proposal with the government, which would see him lead a consortium to purchase at least 60%, but no more than 75% of the Post Office.

“The post office has a dual mandate, commercial and developmental. It requires the state to be a partner, but it requires business to run it,” said Barnes. “What we are looking to do is find a place where the informal market can be comfortable in the formal digital environment. That is the post office.

“Imagine you could go to a place where you know the people, where you go to get vaccinated, collect your antiretrovirals, pay your accounts or collect post; that place can be the Post Office,” he said.

“The post office could be linked to the state – like with Home Affairs. In partnership, we could have a massive supercomputer upon which all people of South Africa reside.”

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Barnes drew a comparison to online retail giant Amazon, which bought a share in the United States Postal Service for them to have physical infrastructure that can assist in delivering parcels.

To secure a vested interest and make the predicted hardships of the initial years of its revival beneficial, Barnes said he would offer to give shares to workers within the Post Office.

When asked if the government had replied to him about the possible deal, he said they had not. “I am respectful with the government; even if they do not respond to me, they should respond to private-public relations,” said Barnes.

When asked why he would want to buy an institution in such a dire state, constantly making losses, he said: “It’s not a post office. It’s a commercially irreplaceable footprint with more physical representation than any bank in South Africa; it’s got the biggest depository of peoples data in South Africa with 18 million beneficiaries, 11.8 addresses, six million depositors and it’s linked to the national payment system through the bank.”

Barnes said that he and his investors would buy it at its net asset value agreed upon by the auditor-general minus the agreed forecast losses placed before the portfolio committee that show extended losses and required capital.

The most recent SAPO annual report (2019/2020), published a year late in March 2021, outlines the financial results for the year ended March 2020. The state-owned entity recorded financial losses of R1.77 billion while its current liabilities exceeded assets by R1.5 billion.

Barnes also previously said that SAPO’s opportunities included participating “in the highly lucrative” e-Commerce space, the digitisation of its processes, the courier space, as well as those activities which fall within SAPO’s legal mandate, namely the distribution of parcels with a mass of up to 1kg.

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Artmotion S.Africa

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