Privatise Post, Post-Haste

Privatising the SAPO would save the fiscus billions, while also freeing up a much-needed institution to be taken over by people that actually know and care about what they are doing.

Photo by Kristina Tripkovic on Unsplash

Time and again the South African Post Office (SAPO) has proven that it cannot survive without bleeding the taxpayer dry, with little to show for it. Bailout after bailout have not solved the inherent issues at SAPO. All the while, private sector couriers and postal alternatives have flourished and proven the SAPO redundant and archaic.

Privatising the SAPO would save the fiscus billions, while also freeing up a much-needed institution to be taken over by people that actually know and care about what they are doing.

Failure to deliver

The SAPO is expected to lose R2 billion as of the 2025 financial year, with a projected R1.7 billion in losses for the following financial year. Operating costs exceed revenue by between 80 – 100%. And this is not even the worst of it. In 2021/22, the SAPO recorded a net loss of R2.2 billion.

As of 2023, its liabilities stood at R6.5 billion. In a period of only 10 years from 2013 to 2023, the SAPO’s losses exceeded R19 billion, with consistent annual losses throughout.

As of 2025, the Auditor-General reported R2.594 billion in irregular expenditure, pointing to mismanagement and corruption as the primary cause. Guilty parties were not investigated sufficiently or given sufficient punishment. The SAPO failed to report thefts amounting to over R100,000 to the police. This is just one of the many examples of violations committed by the SAPO, and is indicative of its culture of lack of accountability or enthusiasm to simply do its job.

The SAPO’s ability to simply deliver the mail is also questionable. In 2022, only 68% of registered mail was delivered. And mail often took months to deliver domestically. I can recall that even a decade ago, a package took over a year to receive. The SAPO has gotten only worse since then.

Misdelivery guaranteed

As is the case with all state-owned enterprises (SOE) in South Africa, the SAPO is doomed to fail. The problem with SOEs is that they lack the incentive to do their job properly. When a private company underperforms, it makes a loss. It must fire workers, shrink its operations, and risk closure. When the public sector fails outright, it receives a gift of billions of Rands.

This creates a perverse incentive to not perform one’s duties. Couple this with the mismanagement and corruption that is rife in our government, and you can see how the SAPO is doomed to fail. Access to public money, in a country with institutional culture that is obsessed with theft and corruption, is a guaranteed way to incentivise theft and a lack of accountability. And of course there is no accountability at SAPO. You cannot expect a manager to hold their staff accountable when they’re also stealing.

On top of this, the mandate of the SAPO is shrinking as superior private alternatives have risen in their place. As I mentioned above, packages used to have to go through the SAPO. We had no alternative. But now, we have a wide variety of couriers, private mailboxes, and store-to-store delivery options to use. This is not to mention that letters have been by and large replaced by email and texting.

The SAPO’s attempts to monopolise small package deliveries is a last-ditch effort to cling to relevancy but is more likely to crash an entire industry and leave countless packages undelivered.

We simply do not need the Post Office for most of our purposes these days. And the knowledge that our package may not even be delivered further incentivises us to look for superior alternatives.

Privatise post-haste

In 2024, Minister of Communications and Digital Technologies Solly Malatsi indicated his desire to seek private partnerships for the Post Office. This is a step in the right direction, but nowhere sufficient.

The SAPO is not going to find rational private partners or investors when its business model is broken and its association with a corrupt government will inevitably lead to graft.

Rather, the only solutions for the SAPO are privatisation or liquidation. The latter will leave many low-income and rural areas unserved. And the former is challenged by ideologues in trade unions and government. But as it stands, if we want to stop wasting billions of tax money that could go to better things, we need to end the SAPO’s drain on the fiscus.

Privatisation of the SAPO’s assets is the best path forward. The SAPO itself must not be privatised, as its centralised nature and corrupt hierarchies are a part of the rot. Rather, its buildings and infrastructure need to be de-bundled and sold, with preference given to efficient and low-cost private courier services.

The functions of the SAPO that are not currently performed by the private sector must be investigated and then put under the purview of private sector providers. This worked immensely well with banks easing the burden on home affairs by providing national ID cards. It can work for other state functions as well.

Grant payments can be processed by large retailers and banks. Official mail is more likely to reach its recipient with a private courier carrying it. And the primary purpose of a post office has already been replaced by technology and private couriers.

For poorer areas, it would be better to subsidise a private company to maintain access than to keep the SAPO on billions of Rands worth of life support.

At the end of the day, the path is clear. The SAPO can die a long, costly death, rife with bailouts or corruption, or be replaced with the alternatives that have already proven to be its better. The SAPO is a zombie institution kept alive through artificial funding. It’s time to cut its life support.

Nicholas Woode-Smith is the managing editor of the Rational Standard and a senior associate of the Free Market Foundation.