Tag: cost of doing business

The possibility that the Government’s insurer South African Special Risk Insurance Association (SASRIA) may not be able to meet its solvency capital requirements caused by the large claims arising from the riots, looting and destruction of last July is becoming a reality.

Economic freedom enshrines personal choice, voluntary exchange and protection of private property. It is the freedom to start a business or hire an employee without government interference, or to invest and trade with whomever you please.

When South Africa entered into a hard and extended national lockdown on 27 March 2020, banks responded rapidly and empathetically to their account holders' financial crisis. According to the Banking Association of South Africa (BASA), as at 24 October 2020, banks had provided over R50 billion in financial relief – R33,61 billion in payment breaks on credit agreements and R16,71 billion under the loan guarantee scheme – to South African businesses and individuals.

Most small and medium businesses in South Africa had a very difficult 2020 financial year, with many, particularly in the retail and hospitality sectors, having to close their doors. Those that survived the pandemic now find themselves having to rebuild – a task made more difficult by a stunted economic environment, with low levels of consumer discretionary income.

South African small, medium and micro-enterprises (SMMEs) are struggling with weak economic growth, load shedding and crime. The regulatory burden also continues to hamper the growth of these businesses and their employment creation abilities.