The South African private sector is in deep trouble. The standard South African business is on its knees and barely keeping the lights on.
In fact, the perpetual decline in business activities of the past few years has eroded the profitability with the average local?business to this sort of extent that business people would earn on their capital putting their money inside a bank, than continuing fighting the entrepreneurial battle.
I am not preaching about the large JSE-listed businesses that manage to do well quick grown timbers . depressed economy. I’m making reference to the countless small- and medium-sized businesses that represent the mainstay within the South African economy. This is the sector that employs probably the most workers which is the key way to obtain social stability.
The powers that be should understand the predicament they then land in.
Not only is bureaucracy and regulation, which?puts?a huge burden on many South African firms problems, the buying price of capital is a lot more than most firms will earn?on his or her ventures. Operational costs in Nigeria – including electricity, water and labour costs – have risen on top of the inflation rate to levels that leave many firms unsustainable.
Now that incomes they are under pressure from lower growth and sinking commodity prices, firms can no longer afford to have large cost burdens. Profits and returns are declining to a point where, with the average private sector firm, continuing operations is?dirty for financial reasons.
Statistics South Africa’s (StatsSA’s) financial surveys demonstrate that lots of firms are about the proverbial precipice
