Home South African Ex-Sapo boss slams government over interference at Post Office

Ex-Sapo boss slams government over interference at Post Office

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Former South African Post Office chief executive Mark Barnes has accused the government of interfering with the institution’s turnaround strategy, which has led to financial difficulties at the Post Office

Former Sapo CEO Mark Barnes. Picture: Jacques Naude

FORMER South African Post Office (Sapo) chief executive Mark Barnes has taken to social media to vent about the state of the frail state-owned entity as it emerged that the group chief financial officer (CFO) had quit barely two months into his tenure.

Barnes accused the government of interfering with the institutions’ turnaround strategy, which has led to financial difficulties at the Post Office.

“My contract as chief executive of Sapo should’ve only ended on Friday. If the government had let management get on with our (board-approved, portfolio-committee-supported) strategy we would’ve completed the turnaround of Sapo by now. Imagine that,” Barnes said on his Twitter account.

Barnes resigned in 2019 after three-and-a-half years at the helm, citing differences on the turnaround strategy in relation to the structure of the SA Post Office group, particularly the location of Postbank.

Barnes wanted the two companies to be fully integrated to offer a suite of services, including mail delivery, e-commerce and financial services.

Armed with an established nationwide network, Barnes believed that the Post Office and Postbank could deliver banking services to the poor for cheaper than any other player.

Barnes left because of a fundamental difference with government on the future strategy and direction of Sapo. He still firmly believes that no post office in the modern world can be commercially sustainable without integrated access to the National Payment System (Postbank).

“No post office in the world operates without it.”

Last week, Sapo confirmed that CFO Khathutshelo Ramukumba had resigned at the end of December citing personal reasons.

“The board has placed on record its appreciation for the sterling work that Mr Ramukumba was able to do during his tenure as CFO, and has conveyed its gratitude to him. The board wishes Mr Ramukumba all the best for the future. The process for the recruitment of a permanent CFO for the Post Office has already commenced, and is firmly under way,” said Sapo in a statement.

The cash-strapped state-owned entity, which is without a permanent chief executive since Barnes’ resignation in 2019, posted a R1.066 billion loss at the end of July 2020, highlighting the entity’s continuing struggle to address irregular contracts identified by former late Auditor-General Kimi Makwetu and ageing infrastructure amid fierce competition from courier companies.

Sapo also posted a net loss of R1.1bn in the 2019/20 financial year and a R1.17bn loss a year earlier, and had been loss-making for a decade.

Sapo, is responsible for the distribution of the government’s R350 monthly Covid-19 grants in addition to the 11 million South African Social Security Agency grants.

Sapo has received R8bn in bailouts from the government. However, it is once again staring bankruptcy in the face, with reports emerging of unpaid rentals and desperate suppliers, postal backlogs and broken ICT systems.

DA communications and digital technology spokesperson Cameron MacKenzie said Sapo had resorted to stopping paying creditors in order to stay afloat.

“Suppliers are once again being ‘parked’ in a queue for payment, despite all processes required to effect payment followed, including quotation, purchase order, service delivered and invoice presented. All that’s missing is the money to pay them,” said MacKenzie.

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