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SA Post office to stop paying grants

Andile Nomabhunga November 28, 2023

1 minute read

The South African Post Office (SAPO) will no longer be responsible for paying social grants to beneficiaries as it hands over this function to the SA Postbank as part of its restructuring plan.

Sapo business rescuers Anoosh Rooplal and Juanito Damons, said the service was not profitable and worsened state-owned Sapo’s financial woes.

“The Sassa payments are made by the Post Office at an estimated loss of more than R200m a year,” the business rescue plan document read.

“The revenue generated by the Post Office from Sassa grants was R798m for financial year 2022 and reduced to R318m for financial year 2023. Sassa fee revenue accounts for R48m for the first six months of financial year 2024.”

According to a recent Sassa report, the Post Office paid out grants to 7.2-million people in March 2022, but had lost more than 1-million clients a year later.

The payments of grants at the Post Office in 2019 led to its branches being targeted by criminals.

“Sapo commenced a contract with Sassa in 2019 for the payment of grants. This led to a sharp increase in the value of cash handled at Sapo branches which led to a dramatic increase in armed robberies, branch burglaries, fraud and theft of cash. The aggregate losses amounted to more than R400m since 2019,” the business plan read.

The rescue plan proposed the payments be taken over by Postbank.

“This plan also suggests migrating or selling certain Sapo branches to Postbank, which would allow Postbank to expand its banking network and accommodate Sapo’s remaining over the counter clients. This strategic move would enable Sapo to focus on its core competencies and enhance its overall financial position.”

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