Retrenchments at SAPO undermine the concept of a developmental state

6 November 2022

The Congress of South African Trade Unions is extremely concerned by the South African Post Office’s announcement that it plans to retrench up to 6000 workers due to a stagnant economy and dwindling funds. We call on the government to intervene to halt the planned retrenchments at the SAPO with immediate effect.

The role of the SAPO needs to be reconsidered and with its infrastructure it can be used to provide more that the services that it currently delivers.

The Federation is disappointed that government continues to weaken the capacity of the state through public service retrenchments. This is pushing more into poverty and is undermining the capacity of the state to deliver much needed services.

The Department of Communications and Digital Technologies needs to work with the SAPO and the Post Bank to develop a coherent turnaround plan to not only save these workers’ jobs and wages, but to stabilise and repivot the SAPO, and to launch the Post Bank.  Government needs to provide the necessary support for these turnaround efforts, including recapitalising the SAPO and Post Bank. 

Parliament and the Department need to prioritise the Postbank Amendment Bill which will establish the Post Bank as a functioning commercial bank targeted at the unbanked and low income consumers as well as the Post Office Amendment Bill which will enable SAPO to expand the products it offers customers, e.g. entering offering courier services, linking with the Post Bank, and offering access to various government services e.g. social grants, IT hubs for SMMEs.  This new imagined role for the SAPO and Post Bank is critical if they are to stabilised and rebuilt and if we are to ensure disadvantaged communities are to have access to important postal, financial and other services.

The capacity of the state was severely tested during the Covid-19 lockdown and the country’s social disparities were laid bare. It looks like government has not learned any lessons.

The collapse of service delivery can be traced back from the decision to push for the reduction of the headcount of personnel in the public sector and the commercialisation of the State-Owned Entities in their mode of governance. This right-wing push for SOEs to operate along the lines of the private sector is the source of the inefficiencies and corruption that we have seen.

We find it very unfortunate that the South African government is continuing to adopt regressive and contractionary policies that only focus on cutting social expenditure and weaken the capacity of the state. The deceleration of fiscal spending since 2014 and now the outright reduction of spending has plunged the economy into the stagnation and has also led to the collapse of state institutions.

Issued by Sizwe Pamla, National Spokesperson, COSATU, 6 November 2022