The South African Post Office has cost taxpayers nearly R10-billion since 2014, and despite numerous financial injections, it continues to struggle. As the entity remains in business rescue – a form of bankruptcy protection – the government faces mounting pressure to keep it afloat. But with South Africa’s economy under stress, many wonder what better use could have been made of this significant amount of money.
Since 2014, South Africa’s Post Office has required continuous bailouts, with taxpayers footing the bill. In July 2023, the organization entered business rescue, and just recently, it was announced that it would receive a R381-million subsidy from the Temporary Employer/Employee Relief Scheme (Ters) fund to cover salaries for the next six months. This follows an earlier R150-million allocation from national treasury.
Despite these efforts, Post Office officials have indicated that the organization will not survive without an additional R3.8-billion bailout. If granted, this will push the total taxpayer-funded bailouts over the last decade to an eye-watering R13-billion. Meanwhile, South Africa’s national budget continues to be constrained by a stagnating economy, shrinking tax base, and growing debt-service costs.
The country’s economic challenges are intensifying, with high unemployment rates and a lack of economic growth. The national budget for the 2025/2026 financial year is under heavy scrutiny. Following the rejection of a proposed VAT increase, a R75-billion shortfall in tax receipts has left the government scrambling to ensure the most efficient use of funds.
Given the country’s financial pressures, it’s worth considering alternative ways that R10-billion could have been better spent, rather than bailing out the struggling Post Office. Here are 10 potential uses of this large sum:
- Tackling the HIV/Aids Funding Shortfall
The US government’s reduction in funding for HIV/Aids treatment has left a R7.5-billion gap in South Africa’s treatment programs. With approximately 7.7-million people living with HIV in South Africa, R10-billion could significantly contribute to lifesaving treatment and prevention programs, making a real difference in public health. - Subsidizing Smart Devices for the Digital Divide
In February, Communications Minister Solly Malatsi announced the removal of ad valorem taxes on smartphones priced under R2,500 to make digital technology more accessible. R10-billion could fully subsidize smartphones for four million South Africans, helping bridge the digital divide and enabling more people to participate in the growing digital economy. - Supporting 40,000 Nsfas Students
Education and training can help alleviate South Africa’s skills mismatch, which contributes to high youth unemployment. The National Student Financial Aid Scheme (Nsfas) typically spends R68,000 per student annually. R10-billion could fund four years of education for nearly 37,000 students, providing them with skills for future employment. - Providing Set-Top Box Subsidies for Digital Migration
South Africa’s digital migration project has faced numerous setbacks, particularly due to insufficient installation of subsidized set-top boxes for indigent households. With R1,500 per installation, R10-billion could supply 6.7 million set-top boxes, ensuring that millions of South Africans are not left behind as the country transitions from analogue to digital television signals. - Fixing Broken Traffic Lights in Johannesburg
In March, President Cyril Ramaphosa expressed disappointment at the state of Johannesburg’s infrastructure, particularly the city’s broken traffic lights. The high costs of repairing these due to vandalism have added to the problem. R10-billion could fix the 250 intersections in need of attention, with R70-million going towards repairs, leaving ample funds to tackle other critical infrastructure issues in the city. - Funding 83,000 Internships for Graduates
South Africa faces high youth unemployment, and one way to tackle this is by providing young graduates with work experience. R10-billion could fund 83,000 internships, offering a stipend of R10,000 per month for one year. These internships would help bridge the gap between education and employment, increasing graduates’ employability. - Subsidizing Solar Geysers for a Million Households
With ongoing load shedding and energy insecurity, South Africa faces a growing demand for alternative energy solutions. Installing solar geysers could help alleviate pressure on the national grid. At R10,000 per installation, R10-billion could fully subsidize solar geysers for one million households, reducing electricity consumption significantly. - Supporting the National School Feeding Scheme
The school feeding scheme plays a vital role in supporting children from low-income families, ensuring they have at least one nutritious meal each day. The government spent R8.4-billion on the program in the 2022/2023 financial year. R10-billion could keep this vital initiative running for another year, helping millions of children focus on their education without the burden of hunger. - Building a 1GW Solar Farm
To tackle load shedding from the supply side, R10-billion could be used to build a 1GW solar farm, adding much-needed renewable energy to South Africa’s national grid. This addition would reduce load shedding by an entire stage, easing the power crisis in the country. - Hiring 100 Doctors for the Public Health Sector
South Africa’s public health sector continues to face staffing shortages, particularly in rural areas. With R10-billion, the government could fund the salaries of 100 doctors for the next decade, improving access to healthcare for underserved communities and helping to address the country’s growing health challenges.
The South African Post Office’s continuous financial struggles highlight the challenges of managing state-owned enterprises in a struggling economy. While bailing out the Post Office may seem like a necessary step, it’s worth considering the long-term benefits of redirecting that money toward initiatives that could address South Africa’s critical issues – from public health and education to energy security and youth unemployment.
In times of financial constraint, it is essential for the government to prioritize spending that will have a lasting positive impact on the nation’s well-being. R10-billion spent in more targeted ways could help improve the lives of millions of South Africans and contribute to building a more sustainable future.
