John Tonui: Inside the race to save Kenya’s postal giant

In an exclusive interview with the Star, Tonui outlined an ambitious turnaround strategy anchored in sweeping legal reforms, digital transformation, and private-sector partnerships that he believes will return the state corporation to profitability within three years.

The overhaul comes after the enactment of the Government Owned Enterprises (GOE) Act, 2025, which repealed the Postal Corporation of Kenya Act of 1998 and transformed PCK from a traditional parastatal into a fully corporatised commercial entity expected to operate on principles of profitability, self-financing, and sustainability.

For decades, Posta’s fortunes were tied to letter delivery and post office boxes. But the rise of email, instant messaging and mobile money steadily eroded demand for those services, leaving hundreds of branches financially strained.

Tonui says the collapse of traditional postal services forced the corporation to rethink its role in the economy.

“Our four core business units are not obsolete. The legacy products inside them are,” he said.

At the centre of the transformation is a plan to digitise all Posta services.

The corporation is migrating customers from physical post office boxes to Virtual P.O. Boxes and expanding door-to-door delivery services.

It is also developing a National Digital Address Infrastructure that will integrate postal data with land registries, county governments and survey authorities.

The system is expected to provide verified digital addresses accessible through open APIs to banks, e-commerce firms and government agencies.

Tonui says the address system could eventually become one of Posta’s most strategic assets in the digital economy.

In logistics, Posta is replacing its paper-based courier operations with automated sorting systems and route-optimised delivery networks.

Three major offices: Nairobi’s City Square, the Jomo Kenyatta International Airport branch and the Mombasa office, are being upgraded into modern exchange and fulfillment centres capable of processing more than 100,000 import and export items.

The facilities are expected to handle customs clearance, warehousing and last-mile delivery for both large businesses and small traders.

“We want the post office to become the affordable default node for any business in Kenya that needs to import, export, warehouse, or fulfil orders,” Tonui said.

The corporation is also aggressively targeting the booming e-commerce sector.

One unnamed strategic partner has committed to channeling 15,000 packages daily through the postal network, translating to roughly 450,000 parcels every month.

Revenue will be generated from clearing, forwarding, handling and last-mile delivery services.

The move is part of Posta’s broader shift toward higher-margin businesses such as e-commerce logistics, cold-chain transportation and digital money transfers.

Tonui says Posta’s greatest advantage remains its nationwide physical footprint, especially in rural and peri-urban areas where many private logistics firms struggle to operate profitably.

Although the corporation historically operated about 625 branches, nearly half were making losses. Around 300 branches were costing the corporation more than Sh1 billion annually to run.

As a result, Posta temporarily closed 125 outlets, reducing its active network to 500 branches.

He defended the closures, saying maintaining all outlets under the old model would have drained resources needed for modernisation.

“Technology hollowed out demand for traditional letters and PO boxes faster than our cost base could adjust,” he said.

But instead of abandoning those areas completely, Posta is converting many of the affected branches into parcel hubs, fulfilment centres, agency banking points and e-commerce pickup stations.

The corporation believes the rural network could become a critical asset as online shopping and digital commerce expand beyond major towns.

To support the transformation, Posta is pursuing new funding models that rely heavily on private capital and strategic partnerships.

Under the GOE Act, the corporation can now enter joint ventures, public-private partnerships and equity arrangements that were previously difficult under the old legal framework.

Tonui says the corporation is pursuing investments in technology infrastructure, e-commerce logistics and real estate development.

One of the most significant partnerships is with China-based Vnlin Logistics Technology (Guangzhou) Co., Ltd, which signed a letter of intent with Posta in January 2026.

Under the arrangement, Vnlin will provide intelligent cargo scanners, automated sorting systems and logistics management software, while Posta contributes its nationwide network, bonded facilities and regulatory support.

Tonui described the arrangement as the future funding model for the corporation.

“Capital and technology come from partners while we monetise our network, regulatory footprint and sovereign trust,” he said.

The corporation is also commercialising its vast property portfolio through structured PPP arrangements and redevelopment projects.

Alongside the transformation, Posta is attempting to tighten internal efficiency and cut operational waste.

Tonui says employee costs remain one of the corporation’s largest expenses, but the organisation is focusing on productivity improvements rather than layoffs.

The corporation has launched a staff reskilling programme aimed at preparing workers for digital operations, logistics and e-commerce support services.

A new performance management framework based on measurable targets has also been introduced.

“We want to lift output per employee and deepen capability across the network,” Tonui said.

The turnaround effort, however, is complicated by a heavy debt burden.

According to Tonui, Posta’s pending liabilities stand at Sh7.7 billion, including pension obligations, supplier debts, unremitted staff deductions, tax arrears and penalties owed to the Kenya Revenue Authority and the Communications Authority.

At the same time, the corporation is owed substantial amounts by government institutions. The Huduma Secretariat is currently its largest debtor, with the pending bills undergoing verification.

The Postmaster General says payment of the debt would significantly ease Posta’s financial pressures and help offset outstanding liabilities.

Despite the financial challenges, the corporation recorded revenue growth of more than 10 per cent in the 2024/25 financial year, which management views as the first clear sign of recovery after years of decline.

The gains were largely driven by growing demand for courier services, parcel delivery, property rentals and digital payment services.

Traditional mail and post office box revenues, however, continue to decline steadily.

“The old revenue streams are declining as expected, while the new streams we have been investing in are accelerating,” Tonui said.

Posta is now betting heavily on Postapay, its digital wallet platform designed for domestic and cross-border money transfers.

The corporation also plans to expand agency-banking services in partnership with M-Pesa, Equity Bank and Co-op Bank, allowing customers to make deposits, withdrawals and bill payments at post offices across the country.

According to the Postmaster General,  the institution ultimately wants to reposition itself as the preferred payments partner for both national and county governments.

Another major project is the rollout of a unified national digital address system integrating GIS and geospatial mapping technology.

The platform is intended to convert postal codes and locations into verified digital identifiers that can support logistics, e-commerce and government service delivery.

For Tonui, the transformation is not simply about rescuing a struggling state corporation. He believes it is about redefining the relevance of the post office in a digital economy.

For decades, Posta symbolised communication in Kenya through letters, telegrams and mailboxes.

Today, it is trying to reinvent itself as a technology-enabled logistics and commerce platform serving online shoppers, digital payments users and businesses moving goods across borders.

Whether the ambitious turnaround succeeds will depend on execution, investor confidence and the corporation’s ability to adapt quickly enough to changing consumer habits.

The management is betting on a vast physical network, government trust, and new commercial freedoms to give the century-old institution a second life in the digital era.