FINANCE Minister Enoch Godongwana has been accused of showing the working class the middle finger after he remained mum on plans to rescue the South African Post Office (Sapo) from liquidation during his Medium Term Budget Policy Statement (MTBPS) last week.
This was after the country’s second-largest labour federation, the South African Federation of Trade Unions (Saftu), expressed concerns that Godongwana did not comment on allocating R3.8 billion to the state-owned enterprise when delivering his MTBPS speech.
Saftu said the National Treasury was in contravention of its undertaking in court to save Sapo.
The cash-strapped state-owned enterprise has been in dire financial straits, and its once wide branch network has significantly shrunk over the years.
Sapo, which is under business rescue, received R2.4bn funding allocation from the National Treasury in 2023. It seeks another bailout amounting to R3.8bn from the National Treasury.
Saftu general secretary Zwelinzima Vavi said the ailing entity has made progress since entering the business rescue three years ago.
Vavi added that Sapo has turned its net asset value from a negative R7.9bn to R840 million between June 2023 and June 2024, bringing it into solvency.
“Furthermore, Sapo has since seen operations improve – reducing backlogs in its mail centre and completing data centre migration,” Vavi said.
He said, however, that despite these recorded partial successes, the Treasury had refused Sapo’s request for an additional R3.8 billion in funding to complete the business rescue process.
He said the additional funds requested were meant to settle accounts with the remainder of Sapo’s creditors, recapitalise the company, and put it in a viable, solvent position.
“The Finance Minister’s conspicuous silence about the provision of funding for completing the business rescue plan in his MTPBS is a slap in the face to the working class. The turnaround of Sapo to solvency at a net asset value of R840 million came at an enormous sacrifice for the workers and the communities that rely on Sapo for services,” said Vavi.
Over 4 875 employees have lost their jobs following the closure of 366 branches, leaving innumerable working-class households unable to access the indispensable services provided by Sapo.
“If Sapo were to be liquidated, it would mean that all this loss and suffering was for naught, thanks to the Treasury!” said Vavi.
The National media unit said there was indeed no in-year allocation for Sapo and Godongwana has already pronounced on this.
“In the engagement between the Minister of Finance and the Minister of Communications and Digital Technologies (DCDT) ahead of the MTBPS tabling, a recommendation was made that the officials of the two departments must identify and propose savings in the DCDT’s appropriated budget to shift to Sapo. Potential areas of savings were then identified, and the National Treasury is awaiting feedback from DCDT in this regard.”
Last month, the Portfolio Committee on Communications and Digital Technologies in Parliament called on Minister Solly Malatsi to urgently establish a ministerial intervention team (MIT) to save Sapo.
This came amid revelations that the entity faced the so-called “day zero” on October 30, the day it was expected to run out of cash reserves required for its operations.
The committee was of the view that MIT must work with the business rescue practitioners and Treasury, among others, to develop a strong business case to save and restore the post office.
“Sapo has a Universal Service Obligation mandate; therefore, it must be saved and retained in public hands. If its liquidation were a reality, the consequences would be devastating for the working class, most of whom are in rural areas,” said Vavi.
He said if Sapo liquidated, the implications for the working class and the public would be:
- The 657 remaining operational branches would close down, which would be catastrophic for heavily reliant, mainly rural communities. Vulnerable communities that depend on the Sapo to access their grants, mail, and other financial services would be left without recourse. This would mean additional transportation costs and, thus, logistical barriers to accessing essential services like affordable banking and grants for the already poor and underserved.
- Five thousand seven hundred remaining workers would lose their jobs, with catastrophic results for these primarily black and elderly women workers who support up to 15 of their unemployed immediate and extended family members. This translates into 85 500 working-class family members who would immediately be consigned into the unimaginable pit of poverty.
He demanded that:
- The Sapo must be given the R3.8 billion requested by the business rescue practitioners to complete the recapitalisation process of Sapo and thereby put it in a viable position.
- Government to Prioritise Sapo Business: We insist that the government lead by example by doing business with Sapo. All state departments and entities should use Sapo's services first to ensure that it has a stable revenue stream and can remain operational.
- Recapitalisation for Infrastructure Development: We call for Sapo's immediate recapitalisation, with funds directed towards infrastructure development. This investment is critical to modernising Sapo's facilities and enhancing its service delivery.
- Skills Development Programmes: The federation emphasises the need for robust skills development initiatives to upskill Sapo employees. This will ensure workers adapt to technological advancements, improving overall efficiency and service quality.
Vavi said Sapo strongly opposed privatisation and retrenchments, adding that it was within the power of the government to save this vital service to the poor and marginalised communities but only if it had the political will to do so.
Vavi also added that the union would demand an urgent meeting with President Cyril Ramaphosa and Godongwana to advance their demands.
manyane.manyane@inl.co.za