South Africa’s oldest company went from brilliant to broke
Since 1792, South Africa’s Post Office has gone from a small office in Cape Town to one of the country’s most important institutions.
However, over the past few years, this once-integral institution has found itself on the brink of liquidation, in business rescue, and reliant on state handouts for survival.
In its 2025 Annual Report, the South African Post Office (SAPO) detailed its transformation and milestones between 1792 to today.
The SAPO began as a small office in the Castle in Cape Town in 1792, when then acting governor Johan Isaac Rhenius issued a proclamation to establish a post office.
Back then, letters were accepted every morning between 9:00 and 10:00, with the postman delivering the mail the next morning. Around this time, delivery by foot was replaced by mail ordinances on horseback.
The 1800s would usher in an exciting transformation of South Africa’s postal service.
In 1815, a mail boat service was introduced between England and the Cape, consisting of fast ships that would carry mail, passengers and light freight on a monthly basis.
The first postboxes, manufactured in England, were introduced in the country in 1860, a few years after the first South African stamp, the Cape Triangular stamp, was commissioned.
The 1860s would also see the completion of a railroad track from Cape Town to Wellington, which was later used to transport mail.
This service worked so well that South Africa’s mail train, including coaches specifically equipped for this purpose, was commissioned in 1883.
These coaches acted as mobile post offices between Cape Town and Hutchinson in the Northern Cape, and continued to run in remote areas of the country until 1950.
1925 saw another significant transformation in South Africa’s postal service – the country’s first steam ships.
Significantly faster than the previous mail boat service, these ships could cross the distance between England and the Cape in 58 days, compared to 114 previously, making this trip weekly.
Other methods of postal transportation were also introduced in the 1900s, including a motor car in 1911 and air transport in 1929.
The first overseas airmail service was introduced in 1932, and by 1945, the Springbok Air Service between South Africa and Britain began to operate.
A decade of excellence
As South Africa ushered in democracy in 1994, the SAPO continued to go from strength to strength.
To celebrate the dawn of democracy, the SAPO issued a set of stamps with peach as a theme. Due to the abolition of Apartheid, South Africa is also readmitted to the Universal Postal Union in this year.
In that same year, the SAPO introduced a Track and Trace system, where each mail article and parcel received a unique bar-coded label that was scanned at each point it was handled.
The start of the 2000s saw landmark shifts in the global postal space, with then President Thabo Mbeki signing the Electronic Communications and Transactions Act into law in 2002.
This was the first Act in the world to be signed into law by an electronic signature and allowed the SAPO to use its authentication service enabled by its Trust Centre.
A year later, the Post Office launched its Paymaster to the Nation project, which allowed social grant recipients to open a Postbank account.
Up to this point, the Post Office had yet to post a profit. It was only in 2004/5 that the SAPO recorded its first operating profit, which was achieved without any adverse effect on its universal service obligations.
In that same year, the SAPO received an international award for its Paymaster to the Nation project and the World Mail Award’s security category for its campaign to promote ethical conduct among employees.
This decade saw the SAPO become an integral part of many South Africans’ lives, with its extensive branch network allowing the Post Office to provide a variety of services.
For example, in 2007, MultiChoice used the SAPO as an outlet for applications for its share offer, which was three times oversubscribed and saw more than 125,000 citizens participate.
The SAPO was also highly regarded at this point in time, ranking among one of the top 25 best employers in South Africa.
The Post Office further entrenched its role in South Africans’ daily lives in 2009, when it introduced its facility for motor vehicle licence renewals.
The year after, the Postbank also celebrated its centenary as a savings bank and, shortly after, is changed from a deposit-taking institution to a fully-fledged bank. At this point in time, over two million South Africans used the Postbank’s services.
By 2011, the SAPO had begun to embrace technological advances even further, launching its virtual post office that enabled users to complete certain transactions electronically.
However, in the decade that followed, the Post Office would go from one of the country’s most well-respected institutions to synonymous with mismanagement and financial strain.
Going broke
In 2014, after three years of protracted strikes, the SAPO recorded a significant R1.5 billion loss, and it was placed under administration until 2015.
At this time, the Auditor-General of South Africa raised concerns about whether the SAPO was still a going concern.
In 2016, South African businessman Mark Barnes took the role of SAPO CEO, and was confident that he could turn the struggling entity around.
However, he said the Post Office needed a cash injection of between R2.5 billion and R3.5 billion to fund this turnaround.
Between the 2014/15 and 2017/18 fiscal years, the SAPO received a cumulative R5.92 billion in government guarantees.
However, these significant bailouts paid off, as Barnes oversaw a consistent increase in the SAPO’s equity during his three-and-a-half-year leadership tenure.
When Barnes joined the SAPO in 2016, the enterprise had R10 billion in equity. By the time he left in 2019, this had increased to R16 billion.
During his time at the helm, Barnes unveiled ambitious plans to modernise the SAPO, making it an eCommerce and banking powerhouse to ensure its future viability.
However, his time at the top was cut short, as Barnes resigned in August 2019, citing differences in the strategy concerning the structure of the South African Post Office group, especially the Postbank.
In the years that followed, the Post Office continued its downward trajectory, with its assets declining from R16 billion to R4.5 billion in just three years.
This was coupled with continued losses and rising liabilities, reaching a six-year high of R12.4 billion in 2023.
This made the SAPO technically insolvent, with its liabilities outweighing its assets.
The Post Office’s struggling financial health reached a boiling point in February 2023, when an unpaid debt saw the enterprise being placed in provisional liquidation.
Rescuing the business
A few months after, the SAPO and the Department of Communication and Digital Technologies applied to place the entity in business rescue.
In July 2023, the High Court granted an order to place the Post Office in business rescue, with Anoosh Rooplal and Juanito Damons appointed as joint business rescue practitioners (BRPs).
Rooplal and Damons were tasked with turning the entity around, which meant rationalising its branch network to 657 branches and writing R7.4 billion in creditor debt back to its income statement in 2024.
The SAPO also retrenched 4,342 employees and paid its creditors 12 cents in the rand.
Positively, the Post Office was able to start the implementation of its business plan without a bailout or state guarantee, although it received capital injections totalling R2.55 billion between 2023 and 2024.
This total was spread over two years, with the Post Office receiving a capital injection of R2.4 billion in the 2023/24 financial year and another of R150 million in 2024/25.
This allowed the Post Office to report its first surplus in a decade in the 2023/24 financial year, although it still recorded an operating loss of R2.17 billion.
In 2024, the government promised to allocate R3.8 billion in funding to the SA Post Office, after the entity warned it would run out of money soon, risking liquidation. However, this funding has yet to be allocated.
In March 2025, Rooplal told Daily Investor that the R3.8 billion was not a request from the Post Office or its BRPs.
“This R3.8 billion and R2.4 billion allocation was contained in the application to court to place the entity in business rescue,” he explained.
“This was the basis on which the business rescue plan was approved. The monies were the basis of the plan and turnaround strategy.”
“The BRPs are eager to receive the funding indicated in the business rescue plan to satisfy the last obligation in the business rescue plan, which will allow them to file a notice of substantial implementation provided for in the Companies Act.”
South Africa’s Rissik Street Post Office
The three images below shows South Africa’s Post Office building in Rissik Street, Johannesburg, over the past century.
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