The Department of Finance has no legal obligation to give the Post Office R3.8 billion.
South Africa’s Department of Finance isn’t legally obligated to provide the R3.8-billion in funding to the South African Post Office that the state-owned entity says it was promised. This is the view of the Constitutional and Legal Services Office , which presented its legal opinion on the matter before Parliament on Friday, 6 February 2026.
“The R3.8 billion cannot, in accordance with our national budget process or PFMA, be regarded as a commitment by the department attaching a ‘legal liability’,” it said. “In our view, the facts present a scenario where the ‘commitment’ made by the department can be described as ‘tentative’, ‘provisional’, ‘conditional’, or as ‘noncommittal’.” According to the Post Office’s Business Rescue Plan, an initial tranche of R2.4 billion was approved by National Treasury in the 2023/24 financial year. The Business Rescue Practitioners , Anoosh Rooplal and Juanito Damons, anticipated that the approval process for the R3.8 billion in funding would be finalised in 2024. However, the Department of Finance rejected the entity’s request for the R3.8 billion in December 2024. Minister Enoch Godongwana attributed the decision to a “tough love” approach for state-owned entities. “There is an opportunity cost when you keep putting money into SOEs because you end up underfunding something else,” he said. The minister highlighted alternative options for the Post Office, including securing investment from private players. He said another option was for the Department of Communications and Digital Technologies to find savings to bridge funding gaps within the South African Post Office. The department was forced to do this in February 2025, when it provided a last-minute R150-million lifeline for the state mail carrier. However, this was only enough to pay the Post Office’s bills. The Post Office emphasised that it still required the R3.8 billion from the National Treasury for the BRP’s turnaround plan to be successful.According to the Post Office’s BRPs, two factors are critical to the success of their business rescue plan: maintaining the Post Office’s exclusivity over small parcel deliveries and receiving the R3.8 billion. It now appears highly unlikely that it will receive the funding, and communications minister Solly Malatsi recently issued a directive to terminate its exclusivity for small parcel deliveries. In mid-December 2025, Malatsi published a directive in the Government Gazette, amending Schedule 1 of the Postal Services Act, which concerns reserved postal services within SAPO’s mandate. The section originally included “all letters, postcards, printed matter, small parcels, and other postal articles subject to the mass or size limitations set”. Malatsi amended it to delete “small parcels”. Despite this, the Post Office’s BRPs emphasised that the entity’s exclusivity over small parcel deliveries under 1kg is still in place. “On 12 December 2025, Honourable Minister Solly Malatsi issued a directive, which was gazetted, amending the Postal Services Act to remove the reserved postal services category for parcels under 1kg,” they said. “This will effectively eliminate SAPO’s exclusivity on small parcels and is expected to negatively affect SAPO’s future postal and courier operations.” They added that they will engage with the Independent Communications Authority of South Africa regarding the minister’s directive. “The exclusivity is still currently in place, as Icasa must ratify directives via its regulatory approval processes. The determination of next steps rests with the regulator, not with SAPO,” the BRPs said. They argued that the Post Office legislated exclusivity aligns with the social mandate the entity should continue to have: providing key basic communication services to all households in South Africa. “The legislative exclusivity was modelled into the turnaround strategy document for SAPO. The loss of this exclusivity negatively impacts the projected revenues,” the BRPs said. “This effectively means the Post Office’s break-even profit/loss position will take much longer to achieve in future, and assuming that these revenue types can be replaced by other types of revenue.”
Source: https://za.headtopics.com/news/devastating-blow-to-the-sa-post-office-79654809