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IOL News
22-07-2025
- Business
- IOL News
Funding shortfall jeopardises SA Post Office's business rescue plan
The South African Post Office's business rescue plan is in jeopardy after promised funds have failed to materialise. No further progress can be made in implementing the Business Rescue Plan without additional funding from the Department of Communications and Digital Technologies (DCDT), Messrs. Anoosh Rooplal and Juanito Damons, the business rescue practitioner (BRPs) of the SA Post Office (Sapo) said on Monday in an update. Because of this, the BRPs are consulting with their legal advisors regarding the company's potential exit from business rescue and the subsequent return of the company to its shareholder, the DCDT, along with a new appointed board. Sapo was placed under business rescue on July 10, 2023 to avoid liquidation. They said in an affidavit that they would award funding to the process, which would encompass funding of a first tranche of R2.4 billion (which was received and used for retrenchments packages) and then a second tranche of R3.8bn, which was going to be used for the infrastructure upgrade and digitilisation process. The BRPS were expecting to to get funding in March 2024 but nothing has materialised to finalise the plan and no funding was allocated to the Sapo per the medium-term budget speech. Of note, Communications and Digital Technologies Minister Solly Malatsi announced this week that Sapo will receive R1.8bn over the Medium-Term Expenditure Framework (MTEF), but this is not funding for the business rescue, it is a universal service obligation (USO). Due to this, a freeze has been implemented on all capital expenditure of Sapo and austerity measures were put in place last year. The BRPs said the freeze on capital expenditure included modernizing Sapo's office hardware infrastructure; building infrastructure upgrades; and IT upgrades. Only critical operational expenses are being incurred. The BRPs are continuing to engage with DCDT in relation to other possible alternatives in the interim. They said they were engaging with DCDT on the constituted Joint Sapo, DCDT and National Treasury Strategic Partners/Investment Task Team, however, the Joint Task Team is yet to convene. However, it got temporary relief of R150 million in funds. "The BRPs were informed at a meeting on 21 February 2025 of a possible virement (the process of transferring items from one financial account to another) of funds of R150m from the DCDT for working capital requirements. National Treasury has since approved the virement and the funds were received in March 2025," the BRPs said. "Although this may provide temporary relief for Sapo until the end of April 2025, the funds are not sufficient to substantially implement the Business Rescue Plan and remove the entity from Business Rescue." Additionally, R381m was allocated from the Temporary Employee-Employer Relief Scheme (TERS) in April 2025 to cover salary costs for a period of six months. A further R1.8bn has been allocated for the Post Office to fulfil its Universal Services Obligation (USO). The USO is a policy that ensures basic services, like telecommunications, are available toeveryone, regardless of their location or ability to pay. There is a shortfall to funds required. The BRPs said R3.8bn is still required to pay the remaining dividends to statutory creditors, provide enough working capital to the business, and to invest in certain infrastructure upgrades in order to sufficiently implement its turnaround strategy. Due to this funding uncertainty, the BRPs said they were aggressively focusing on collecting all outstanding debtors and increasing revenues where possible. Meanwhile, an extensive amount of work has gone into preparing a detailed strategy and financial model, and which are considered by the BRPs to be important supporting documents to the business rescue plan. The detailed strategy and financial model set out the turnaround plan and deals with the 'future proofing' component of the business rescue plan. These documents were presented to the DCDT, National Treasury and the Parliamentary Portfolio Committee on Communications and Digital Technologies. The BRPs said they have implemented the Business Rescue Plan to the extent possible despite the funding constraints. "The business rescue plan can only be fully implemented once we receive the funding or part of the funding that was committed by the government," they said. As regards creditor claims and payments, a total of 99.6% of creditor dividends of 12 cents amounting to R1 015bn have been paid on August 31, 2024. The remaining 0.4% of creditors is a combination of disputed claims and unverified landlord queries. Meanwhile, the top-up dividend of 18 cents to statutory and payroll creditors, including SA Revenue Service, the relevant medical aid schemes and the Post Office retirement fund remains outstanding and payment is conditional upon the receipt of the R3.8bn funding from the National Treasury unlessnew conditions are negotiated with these creditors. These creditors need to be paid. BUSINESS REPORT
The Citizen
14-07-2025
- Business
- The Citizen
Sassa warns grant beneficiaries to comply or face suspension and repayment
The South African Social Security Agency (Sassa) has warned that failure to comply with the current review process may result in the suspension and possible permanent lapsing of grants. 'Continued non-compliance may lead to the permanent lapsing of their grants. Beneficiaries are advised that Sassa is also empowered by the Act [9 of 2004] to recoup any money that would have been paid to the beneficiary incorrectly. 'This means that, should we find out that you have been receiving social grants you were not eligible to receive, Sassa will institute a debt recovery process where you will have to pay back the money,' Sassa CEO Themba Matlou warned. Matlou's warning came during a media briefing on the current social grant review process held in Pretoria today. Over 140 000 notifications sent to beneficiaries Matlou announced that the review process has already seen over 140 000 SMS notifications sent to beneficiaries selected for review. However, he noted that non-responsiveness suggests some beneficiaries may have changed their contact details without informing Sassa. Matlou acknowledged that while Sassa communicated the changes through various media platforms and public announcements, some beneficiaries may have missed the communication. 'Sassa has in previous years noticed that many beneficiaries do not update their contact details and consequently do not receive the notices to come in and conduct a review. We have sent out bulk SMS messages and registered letters to the addresses we have in our possession. 'We are working on strengthening our communication approach, including more robust community-level engagement and increased visibility of information on official and public platforms. We will also increase the operating hours and employ additional capacity to address long queues recently experienced during this important review process,' Matlou said. He added that the agency is working hard to automate the review process by introducing self-service options using online platforms to make it easier for beneficiaries to complete their reviews and reduce queues at local offices. Matlou urged beneficiaries who have not received their payment or are uncertain about their payment status to contact Sassa on the toll-free number 0800 60 10 11 or visit Budget allocation conditions While Sassa is mandated by the Social Assistance Act 13 of 2004 to review social grants, Matlou said the agency is also operating under strict budgetary conditions set by the National Treasury. He explained that in February 2025, the National Treasury issued Sassa with a preliminary allocation letter for the 2025 Medium-Term Expenditure Framework, which contained compliance framework conditions that became binding and now form part of approved budget allocations for the financial year. 'These conditions direct Sassa to find mechanisms to save costs through its review process to ensure money is not paid to undeserving beneficiaries, to enhance fiscal accountability, improve operational efficiency, and ensure the integrity of the Social Assistance Programme. 'They cover critical areas such as income verification, biometric checks, inter-agency data cross-referencing, and quarterly reporting obligations. The conditions also reflect Treasury's intent to strengthen oversight and promote transparency in the administration of social grants,' Matlou said. Matlou reaffirmed Sassa's commitment to transparency, accountability and continuous improvement of the social grant system. 'We take our responsibility seriously to serve the most vulnerable in our society and will work harder to ensure no beneficiary is left confused or disadvantaged. Sassa remains committed to protecting the rights and dignity of each beneficiary by ensuring no one who qualifies is unfairly penalised. 'Our efforts are directed at preserving the social assistance system for those who genuinely need it. Sassa enforces a zero-tolerance policy towards fraud and corruption, both from beneficiaries and within its own ranks,' he said. He added that the agency is finalising the implementation of biometric identification infrastructure to enhance security and integrity in grant administration processes. – Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. Read original story on At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
14-07-2025
- Business
- IOL News
R2. 5 billion bailout bonanza: SABC and Post Office get a lifeline
Communications and Digital Technologies Minister Solly Malatsi has announced that the SABC will receive over R700 million and the South African Post Office (SAPO) R1.8 billion Image: Solly Malatsi/X Communications and Digital Technologies Minister Solly Malatsi has announced that the SABC will receive over R700 million and the South African Post Office (SAPO) R1.8 billion over the Medium-Term Expenditure Framework (MTEF). Tabling the Department's 2025/26 Budget Vote in Parliament last week, Malatsi said the allocations were aimed at supporting the SABC's public broadcasting mandate and stabilising SAPO's declining services. "The SABC will receive R704 million over the MTEF. This includes R43 million for programme production, R464 million to support the core public broadcasting, R197 million for Channel Africa, which amplifies South Africa's voice across the continent," Malatsi said. Last month, IOL reported that SABC CEO Nomsa Chabeli raised concerns about the broadcaster's financial sustainability, highlighting that the cost of its public mandate remains unfunded and that the SABC depends heavily on commercial revenue to support these obligations. "It's important to note that when we have discussions about the SABC's financial sustainability, we remember the cost of the public mandate that is currently unfunded. The SABC, from a commercial perspective, takes commercial revenue to fund the public mandate that's our current model." Chabeli said. She also pointed out that less than 20% of households in South Africa are paying for TV licenses, a situation that has led to a steady decline in funding for the public broadcaster. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The funding announcements come amid growing concerns about the long-term sustainability of both the SABC and SAPO. Many South Africans have criticised repeated government bailouts, questioning whether money alone can fix deep-rooted issues such as outdated business models and competition from digital alternatives. "The South African Post Office is allocated R8 billion over the MTEF to fulfil its universal service obligations, improve service delivery. This funding will support SAPO's efforts to diversify revenue, rebuild trust, and stabilise operations through strategic partnerships and good governance". Malatsi said. Last month, SAPO also received a R381 million wage subsidy from the government, aimed at covering employee salaries for the next six months as part of the ongoing business rescue process. IOL News Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
11-07-2025
- Business
- IOL News
No grants will be cancelled without verification and due process, says Social Development Minister Tolashe
As the Department modernises SASSA and reviews grant eligibility, Minister of Social Development Sisisi Tolashe stresses no grant will be stopped without due process, urging beneficiaries to cooperate with the verification process. Minister of Social Development Sisisi Tolashe stated that no social grants will be cancelled without proper verification and due process. Delivering the department's Budget for the 2025/2026 financial year, Tolashe assured Parliament that the Department remains committed to ensuring grants reach only eligible recipients. She noted that recent efforts to review beneficiaries are not about unfairly cutting people off, but about ensuring that only those eligible receive grants. 'We have not stopped or suspended any grant without due process. I wish to appeal to all beneficiaries who have received correspondence to visit SASSA offices and undergo a review process,' she said. Tolashe emphasised that the grant system is a vital social safety net, supporting over 27 million beneficiaries, including 13 million children and more than 4 million older persons. Of the department's R294 billion budget allocation, R284 billion will go directly to monthly social assistance, while SASSA receives R24.7 billion for grant administration over the Medium-Term Expenditure Framework period.
IOL News
27-06-2025
- Business
- IOL News
Budget cuts expose SA's public service crisis
While the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding. Image: Rawpixel/Freepik AS South Africa grapples with deepening inequalities and a faltering public service, the recently adopted Budget Vote Reports for 2025 expose a troubling reality: while the government touts nominal increases in budget allocations, the harsh truth reveals a significant erosion of real-term funding. The Department of Public Service and Administration (DPSA), Public Service Commission (PSC), and National School of Governance (NSG) all face budget cuts that threaten to undermine service delivery and exacerbate existing disparities. In a virtual meeting this week, the Portfolio Committee on Public Service and Administration, chaired by the DA's Jan Naudé De Villiers, confronted these critical issues head-on. The reports presented revealed a complex interplay between budget allocations and the pressing needs of public service delivery. Julius Ngoepe, the committee content advisor, noted that the overall budget allocation for the DPSA for 2025/26 stood at R564 million, reflecting a nominal increase of 4.67% from R539m in 2024/25. He pointed out: 'This amount represents a decrease of 0.03% in real terms,' highlighting the painful reality of inflation outpacing budgetary growth. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The DPSA's budget over the Medium-Term Expenditure Framework (MTEF) period is projected at R1.8 billion, with a staggering 54.4%, or R966m, earmarked for the compensation of employees (COE). This allocation raised critical questions about the sustainability of service delivery, particularly as spending on transfers and subsidies accounts for only 10.2%, or R178m, with R158m designated for the Centre for Public Service Innovation (CPSI). During the meeting, members voiced their concerns regarding the budget's failure to address systemic inequalities within the public service. The EFF's Sixolisa Gcilishe, lamented the budget's failure to address systemic inequalities: 'The budget failed to address systematic inequalities in the public service as reflected in the wage disparities between top and lower management.' She further highlighted the inadequacy of the R300m allocated for administration in Programme 1, saying: 'Frontline workers remain underpaid,' and questioned the effectiveness of the budget cuts on service delivery. The chairperson acknowledged the gravity of these concerns, saying: 'This was an internal meeting to consider and adopt the DPSA, PSC, and NSG Budget Vote Reports.' He emphasised the importance of documenting these discussions, urging members to reflect their views in the report. Gcilishe insisted that 'the comments should be reflected in the report because the government would not be aware if they were only made in speeches and not documented'. The meeting also saw a significant push for changes in the funding model for the Thusong service centres. The DA's Leah Potgieter proposed: 'The funding should be split among the various departments that were making use of the centres,' leading to an amendment in the recommendation. National and provincial departments providing services in the Thusong service centres should co-fund the centres to ensure their long-term sustainability.' As the discussion progressed, the committee grappled with the implications of budget cuts on service delivery. The committee secretary, Masixole Zibeko, advised that some comments should be added to the report while others should be reserved for the Budget Debate. He cautioned members against introducing new recommendations at this stage, saying: 'Members had opportunities on two previous occasions to do so.' The sentiment of dissatisfaction with budget cuts was echoed by Ngoepe, who said: 'Every sector had expressed dissatisfaction with budget cuts.' This sentiment was further reinforced by the MK Party's Japhta Malinga, who warned that adding new issues at this stage was 'not doing justice to the process'. The chairperson agreed, saying: 'The DPSA had a role to play, but solving youth unemployment was not the sole responsibility of the Department.' The NSG's budget allocation for 2025/26 was also scrutinised, with Ngoepe presenting a budget of R228m, a nominal increase of 4.5% from R218m in 2024/25. Potgieter raised concerns about the allocation of more than 51% of the budget for administration rather than training programmes, saying the bloated administration and minimal training should be highlighted in the report. The chairperson acknowledged this as a valid concern, noting: 'This is a general concern in almost every department across government.' In the PSC report, the overall budget allocation for 2025/26 is R302m, which represents an increase of 4.68% in nominal terms but a decrease of 0.02% in real terms. Langa emphasised the need for security measures for PSC commissioners, saying the critical role of the PSC commissioners and the need for protection against threats at all times should be reflected in the report.
