Sapo to review supplier contracts in cost-cutting efforts

Following instruction from its new board, South African Post Office (SAPO) management will now have to review all its contracts to ensure “they are still relevant to the business requirements”.

“The board took a decision that management should embark on a contract review exercise in order to identify opportunities to derive much-needed savings,” explained SAPO board chairperson Colleen Makhubele.

The new board was appointed in the third quarter of 2019 and has since been working to overcome a number of challenges faced by the embattled organisation including auditor-general findings against it. As such, they have set a 90-day deadline to stabilise the financial position of the organisation.

Chief among the board’s concerns was the need to ensure the fast-tracking of Social Security Agency of South Africa (SASSA) payments, especially in areas lacking adequate infrastructure.

In October 2018, SASSA entered into a contract with the Post Office to take over social grant payments. According to the government news agency, more than 70% of the country’s social grant beneficiaries receive their money through the Post Office’s SASSA card.

Sapo’s future

The organisation reportedly plans to reposition itself to become an integrated service solutions provider in the near future.

In order to do this, SAPO plans to reposition their distribution network, warehouses and retail infrastructure as a service platform that can be leveraged for profitability, innovation and service delivery.

The board’s intention is for the Post Office to become a payment platform and distribution network of choice for government.

Beyond facilitating the payment of SASSA grants, the Post Office currently distributes medicine on behalf of the department of health and school textbooks for the department of basic education. It also assists in the registration of poor households for set-top decoders as part of the digital terrestrial television migration. Additionally, almost 400 Post Office branches serve as motor vehicle license renewal outlets.

“We are driving management aggressively towards a pronounced strategy of a Post Office that is relevant in the digital economy and one that is central to the provision of Fourth Industrial Revolution products and services; a Post Office that is trusted and reliable to deliver, deliver on time and deliver the parcels unviolated,” concluded Makhubele.

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