The brutal impact of South Africa’s economy on small business

A new study by financial services company Retail Capital shows that small businesses in South Africa are buckling – knocked by a low-growth economy, unreliable utilities and rising operating costs.

The study, entitled: Roll With The Punches, found, among other things, that business is only good for 10% of our SMEs, while the other 90% are floundering thanks to the weak economy.

Collectively, SMEs keep 10.8 million people employed, accounting for 66% of all formal jobs, they contribute 20% to the GDP and pay 6% of corporate taxes.

“They are South Africa’s lifeline,” the group said.

Retail Capital conducted the study in October 2019 and surveyed over 700 entrepreneurs using ovatoyou’s online quantitative methodology.

More than half (55%) of respondents say that demand is shrinking and there is less business as people are buying less, while 58% say operating costs are a threat to their business.

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