The gap between BotswanaPost’s revenue and expenditure continues to widen, thanks largely to the amalgamation with its sister company – Botswana Couriers and Logistics some three years ago.
The two turned into a single entity after the sole shareholder – Botswana government issued out an instruction for the two entities to amalgamate following the cancelation of a proposed merger between BotswanaPost and another State Owned Entity – Botswana Savings Bank (BSB).
Last week, the company’s executives came out very clear that going to bed with an insolvent Botswana Couriers in 2018 has resulted in a weakened balance sheet.
As a result, BotswanaPost’s Chief executive officer – Cornelius Ramatlhakwane last week called on for a recapitalization of the company which he said is necessary to strengthen its balance sheet.
“This would support the company’s operation efforts and ensure its sustainability”, said Ramatlhakwane when addressing the Parliamentary Committee on Transport Works, Communication, and Technology last week.
He admitted that his company is experiencing poor cash flow while at the same time overtrading.
With a track record of cumulative losses from its profitable years, it appears BotswanaPost has once again plunged into financial deep waters.
A look at the company’s ten-year timeframe (2010-2020) shows that in the first four years the company was characterized by perpetual losses and subpar business performance, with losses cumulative to P86 million.
The government of Botswana as a signatory of the Universal Postal Union Convention has a duty to ensure universal service provision to its citizens through Botswana Post. The company’s CEO said that they carry the burden of Universal Service Obligation (USO) payment shortfalls. USO is the obligation to provide access to telegraph services to people in the rural and remote areas at an affordable and reasonable price. Ramatlhakwane said that their major shareholder, being the government is non-committal even though the post continues to deliver on the obligation. “The government is required to reinvest in the post office. This is something where we continue to deliver on our end, and we believe that government could do better because it is the biggest contributor to our poor balance sheet and liquidity,” Ramatlhakwane said.
In terms of financial support, Botswana Post must fully reimburse the outstanding USO claim deficit of P139 million. Ramatlhakwane told the committee that government, in turn, needs to fully comply with ensuring reinvestment of this fund as it is hampering the progress the post office would otherwise be making. The designated postal services provider faces endless challenges, all of which are furnaced by the government. Ramatlhakwane said they have unstainable business contracts with the government. For example, Daily News. “Botswana Post used to deliver Daily News for government, and there were not really any major issues, and then this was taken to the private sector, and the private sector failed,” he said. Botswana Post has over the past two years been working with Daily News with no substantial contracts, but just a few three, four, and six months extensions, Ramatlhakwane explained.
Botswana Post has a physical channel reach of 220 touchpoints across the country, 126 post offices, 74 postal agencies and 20 kiosks.