If you’re a landlord and the SA Post Office is a tenant and owes you money, you now know what to do. You get a court to put the Post Office into provisional liquidation and, if events of the past week are any guide, you’ll get your money immediately.
But hurry, hurry. While one creditor got their rent paid up after going to court last week, a rush to court by others — landlords, power suppliers, phone companies — could well end up liquidating the Post Office altogether. That would make SA the only even vaguely modern economy in the world to have no national postal service at all.
The collapse of the Post Office is a staggering failure, and while it has been a long time coming the rate of collapse has increased dramatically under President Cyril Ramaphosa, who has appointed a string of deadbeat communications ministers who in turn have appointed a series of deadbeat boards who have appointed deadbeat managers.
Last year already auditor-general Tsakani Maluleke qualified the Post Office’s accounts and declared that “the Post Office did not adequately disclose all the principal events and conditions that may cast significant doubt on its ability to continue as a going concern”.
Indeed, the Post Office’s 2022 annual report made clear it was insolvent. Liabilities exceeded assets by more than R4bn. It cannot pay its debts and it has been missing pension payments and constantly fails to meet staff medical aid payments.
In the face of this the government’s response has been quintessential ANC — to pretend nothing is that seriously wrong that it can’t be fixed. The response to the threat of imminent collapse by Mondli Gungubele, shifted out of the presidency by Ramaphosa in his recent reshuffle to the department of communications & digital technologies, is classic.
He said in a statement on Sunday that he had “requested that the board and management of [the Post Office] provide him with a detailed account of the circumstances that led to this development, the steps taken by the board to address the issue, and the measures [it] intends to implement to resolve the situation promptly”.
You sort of don’t want to depress him by telling him that is never going to happen
Hahahaha. Yeah, right, like the Post Office board and management have a cunning plan to become insanely profitable. He had obviously woken up to the fact that this institution is the vehicle through which the government makes its welfare payments.
Gungubele replaced Khumbudzo Ntshavheni, who was moved to the relative safety of the presidency. A year ago she dismissed out of hand, as “a bit rich”, an offer from banker and former Post Office CEO Mark Barnes to buy control of the institution and run it in a partnership with the state, rather like Telkom is. She said a Post Office turnaround plan had been given to parliament but kept secret for commercial reasons.
Gungubele’s Sunday statement, defaulting to utopian smart cities and fast trains when confronted with more evidence of ANC economic destruction, “emphasised the importance of [the Post Office] as a crucial government service platform which caters to millions of citizens and cannot afford to cease its operations”. His department and the Post Office would work diligently to ensure it transforms into an independent and profitable business entity for the benefit of the country’s citizens.
You sort of don’t want to depress him by telling him that is never going to happen. You can have an ANC government or you can have efficient institutions, but you can’t have both. The governing party’s problem here is easily identified. It thought running a modern economy would be a breeze. But it still doesn’t know what it doesn’t know, a potentially fatal fault the party has been able to ignore because colonialism and apartheid left it a legacy toxic enough to lean its head against and go to sleep on for nearly 30 years.
Too late
Now that is dissipating. Barnes left the Post Office in August 2019 after the government decided to hive off Post Bank. He argued then that any modern postal service needs to be able to provide financial services and have access to the national payments system. But the ANC wanted a “state bank” and seems not to have understood that that is exactly what the Post Bank was.
It may slowly be dawning on the party now, but probably too late, as always. Media reports that finance minister Enoch Godongwana said in January that “a regulatory framework is being developed to use the Post Office as a vehicle for a proposed state bank”.
What exactly that means is anyone’s guess, and Godongwana probably doesn’t know either. But it is clear that even Eskom, for the ANC, pales into insignificance as a problem with a Post Office collapse directly threatening the distribution of welfare payments to almost 20-million adult citizens. With an election in a year’s time, a missed payment anytime between now and then would be political death for the ANC and Ramaphosa.
A real political crisis looms now for the governing party. An emergency. The Post Office is said to be about R9bn underwater. No-one is going to buy it with debt like that still attached. And even if the debt were to go away, there’s no-one even remotely on the horizon — other than Barnes, possibly — with the swagger or vision to save it.
It’s SAA all over again, but with more at stake and far less time to find the money.
• Bruce is a former editor of Business Day and the Financial Mail.
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