Technology and the Turnround of the South African Post Office
Mail & Express Review February 2009
Read MoreTag: South African Post Office
New CEO for the South African Post Office
The embattled Post Office has finally appointed a new CEO. Bruce Whitfield talks to the lady in the hotseat.
Bruce Whitfield:
Well the Post Office has got a new chief executive. The woman who has occupied the position in an acting capacity since Ivy Matsepe-Casaburri sacked the last guy, he was Khutso Mampeule, who has taking over the position which had been occupied variously over the past 10 years by Mampeule, before him Maanda Manyatshe who had been accused of being crooked and before that a series of chairman had been in an acting CEO capacity. And we have been following the story quite closely ever since we were leaked a Deloitte governance report into the goings on at the Post Office, it made fascinating reading, it made fascinating listening, and Motshoanetsi Lefoka is the person who has taken over as chief executive at the South African Post Office and you are a braver person than I am Motshoanetsi.
Motshoanetsi Lefoka:
Good evening to you Bruce.
Bruce Whitfield:
So many of your predecessors have come and gone in recent years, you are probably the third chief executive at the Post Office in the last three years, a lot of people would say this is a poisoned chalice and you are taking on a very big job. What is your response to that?
Motshoanetsi Lefoka:
The job is quite a challenge and I believe the Post Office is an exciting organisation and I think the Post Office has proved itself despite the challenges that it has had in the past few years. But I also believe that some of the leadership that we have had have really put stability into the organisation and put the platform to work currently as the organisation we are experiencing. So it is quite an exciting time for the Post Office and an exciting time for me personally.
South Africa: Post Office to Spend R 2,6 bn
The South African Post Office planned capital expenditure of R 2,6 bn on new and existing infrastructure over the next three years to continue current growth, it said yesterday.
Newly appointed chairwoman Vuyo Mahlati told senior employees, union representatives and the media yesterday that the Post Office would more than double its capital expenditure in the coming year. The money would go to building new post offices, upgrading others and improving access to information technology (IT).
“We will increase capital expenditures from R 300 m in the last financial year to R 892m (this year),” she said, announcing year-end results in Johannesburg.
This would increase to R922m in 2009 and then drop to R800m in 2010, once plans had been met.
Chief financial officer Nick Buick said the investment would be split 60 pct-40 pct between building and improving property infrastructure, and increasing access to broadband and information and communications technology.
The government contributes about R300m annually to the Post Office, and had committed to this figure for the next two years at least.
This money was to subsidies meeting the needs of rural South Africans.
A further R 200 m for this purpose would come from the Post Office’s cash resources – currently at R 4,5 bn. 1 British Pound (GBP) = 14.61709 South African Rand (ZAR)
Read MoreCase study: Pension products in South Africa
Interview with Mrs. Totsie Memela Khambule, Managing Director of the South Africa Postbank.
Q: Could you describe the role of South Africa PostBank with regards to channelling domestic financial resources in your country?
A: The role of South Africa PostBank is to provide access to the underserved markets in our country, which are estimated to represent 13 million people. Our institution also inculcates a culture of savings to all South African communities. Moreover, the South Africa Postbank (SAPO) extends access to government departments by supporting government initiatives that provide financial services but do not have their own retail network to reach the communities. We are committed to becoming a provider of choice for government services. To contribute to the social and economic development of our economy is key for us.
Q: Why address pensioners in a relatively young country such as South Africa? Do you plan to extend the Pension FlexiCard project to other customer segments?
A: The South African government currently provides pensions and social grants to 11.4 million people for a total value of ZAR 4.6 billion per month (approx 0.6 billion USD). The majority of these beneficiaries are paid in cash. The government objective is to have within a number of five years 50% of the population banked.
We believe we have a platform and the facilities to serve this market. The other objective is to reduce the cost of banking for the beneficiaries by enabling them to access debit cards which can be used in retail points of sale. The Pension Flexi Card offered by Postbank, currently targeted to the pensioners market, can be extended to other social grant beneficiaries.
Q: What have been the considerations behind the implementation of biometric technology?
A: The main consideration leading to the development of SAPO’s Biometric Solution was to offer a competitive pension/social grant payment solution that was secure, affordable and supportive to the government’s objective of increasing access to finance for the unbanked. At the time, SAPO was losing pension customers to the competitors who already had biometric based payment solutions and the decision to invest was based on a strategic move to regain market share.
The initial project was concluded within 50 days and the cost to implement the system at 118 post office branches was ZAR 11,8 million (approx. 1.6 million USD). Apart from the technological challenges that had to be tackled (such as the use of satellite technology and the use of smart card encryption technology), the biometric solution also had to guarantee customer choice. This is why we opted for an open-system approach that allowed the beneficiary to choose how and when payments are made.
Contact: [email protected] or [email protected]
Read MoreSouth Africa Post Office – budget gives room for some creative expansion
After years of financial losses and poor operating performances the SA Post Office (Sapo) is beginning to redeem itself. It has made a remarkable transition from a dud state-owned entity into a profitable outfit that has become a net taxpayer for the first time. Credit for this should largely go to former CEO Maanda Manyatshe, who took over the loss-making organisation five years ago and turned it around. He left to join MTN earlier this year. His successor, Khutso Mampeule, who arrived at Sapo in June, has inherited a stable organisation with good cash flows to enable him to steer it in a new direction that seeks to modernise the postal system and corporatise its banking arm, Post Bank, in a few years. Sapo’s operational profits jumped 400% to R135m (R27m) for the March 2005 financial year. Post Bank, which once suffered huge losses, is powering away, says Mampeule, with 13% growth in funds to R2bn.
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