Post Office will continue making losses – Treasury

2019-02-20 14:35 - Lameez Omarjee
Post Office. (Duncan Alfreds, News24)

Contending with declining consumer numbers and ageing infrastructure, the SA Post Office is expected to continue incurring losses, Treasury highlighted in the 2019 Budget Review.

Finance Minister Tito Mboweni tabled the National Budget in parliament on Wednesday, where he said that the deteriorating financial position of several large state-owned enterprises (SOEs) poses a risk to public finances.

Some SOEs are still heavily reliant on debt to fund their operation, one of them being the Post Office, according to the Budget Review document.

In the 2017/18 financial year government recapitalised the Post Office with R3.7bn, to help settle its maturing debt.

In the 2018/19 financial year, government recapitalised the Post Office with R2.9bn to "extinguish" its entire debt and to ensure continued operations, the review states.

An additional R1.5bn has been allocated to the Post Office for the medium term.

The Post office is also now responsible for the distribution of social grants, Treasury noted.