Parliamentary Committee Backs Posta's Digital Future

On Wednesday, October 8, 2025, the Parliamentary Departmental Committee on Communication, Information and Innovation reviewed and endorsed a Cabinet memorandum outlining the Postal Corporation of Kenya Transformation Strategy. This parliamentary backing signals a strong intent by lawmakers to implement swift and significant changes to revive Posta Kenya. The strategy seeks to transform PCK into a modern, financially stable national hub for logistics, e-commerce, and digital financial services, while ensuring it continues to provide universal service across the country.

Postmaster General John Tonui informed Members of Parliament that the transformation plan aims to shift Posta from a traditional postal operator to a hybrid logistics and payments service. This new direction is expected to support government programmes and private-sector e-commerce initiatives.

Historical Context and Financial Challenges

Posta Kenya, established by an Act of Parliament in 1998, has historically been a cornerstone of communication in the country, with over 500 outlets nationwide. However, the rise of internet services and mobile communication, particularly mobile money platforms like Safaricom's M-Pesa, has drastically reduced the demand for physical mail delivery. The number of letters handled by Posta plummeted from 11.8 million in 2019 to 1.2 million in 2023, an 89.7% drop in domestic letter volumes between April 2024 and March 2025 alone.

The corporation is currently grappling with significant financial distress, with liabilities amounting to approximately KSh 7.2 billion. These liabilities include KSh 2.2 billion in unremitted pension deductions, KSh 1.7 billion owed to suppliers, KSh 2.7 billion in accrued taxes to the Kenya Revenue Authority (KRA), and KSh 600 million owed to banks. An audit report by Auditor-General Nancy Gathungu for the year ending June 2024 highlighted a net loss of KSh 1.1 billion, pushing accumulated deficits to KSh 7.3 billion and current liabilities to KSh 9.5 billion, against current assets of KSh 1.8 billion.

Policy and Governance Shifts

The proposed transformation strategy is a joint submission by the National Treasury, the Ministry of Information, Communications & the Digital Economy, the Ministry of Lands, and the Office of the Attorney General. It aligns with the government's broader strategy to restructure state corporations for self-reliance and profitability. The government has already committed KSh 3 billion in turnaround funds, with KSh 1 billion specifically allocated for new technology and modern infrastructure.

Lawmakers have suggested practical measures to boost Posta's revenue and public value. These include reinstating Posta as a key payment channel for national social protection programmes like Inua Jamii and integrating PostaPay, the corporation's digital money order service, with the Ministry of Education's capitation payments to schools and the distribution of National Government Constituencies Development Fund (NGCDF) bursary funds. These initiatives aim to leverage Posta's extensive network of over 600 branches nationwide.

Stakeholders and Testimonies

Postmaster General John Tonui has been vocal about the need for this transformation, stating that resolving the KSh 7.2 billion debt is crucial before attracting a strategic investor. He indicated that a Cabinet memo proposing balance sheet restructuring is at an advanced stage. The plan involves selling dormant assets, primarily land, valued at approximately KSh 7.9 billion, to clear historical debts.

Analysts emphasize the need for clarity on timelines, costs, and safeguards for the digital transformation. The Communications Authority of Kenya (CA) has previously issued guidelines compelling postal and courier operators to acquire standardised ICT equipment for monitoring deliveries, promoting e-commerce, and ensuring secure online payment platforms.

Evidence and Data

Risks and Implications

The successful implementation of this digital transformation is critical for Posta Kenya's survival. Without drastic measures, the corporation risks collapsing under the weight of its mismanagement and financial woes. The shift to digital services also presents challenges, such as the recent significant price hike for MPost virtual postal boxes, which raised concerns about accessibility and affordability, particularly for SMEs and rural clients.

Unknowns and Controversies

While the parliamentary committee has endorsed the strategy, specific timelines for the sale of dormant assets and the attraction of a strategic investor remain to be publicly detailed. The exact nature of the public-private partnership model, envisioned as a 15-year revenue-sharing arrangement for its courier and financial services divisions, also requires further clarification.

Timeline and Next Steps

The Cabinet memo proposing balance sheet restructuring is currently before the National Treasury. Once Cabinet approval is secured, Posta Kenya plans to proceed with attracting a strategic partner through a competitive process. The CEO is targeting a visible improvement in service performance and profitability within the next 12 to 18 months.

What to Watch

Key developments to watch include the Cabinet's approval of the asset sale and restructuring plan, the specifics of the public-private partnerships, and the rollout of new digital services. The integration of Posta's services with government social protection and education payment systems will be a significant indicator of the strategy's impact. The corporation's ability to leverage its extensive physical network for last-mile delivery in e-commerce, especially in rural areas, will also be crucial.