South Africa’s economy is struggling. A number of factors are behind the decline. These include severe power cuts which are taking their toll on all spheres of the economy, rising inflation, increases in food prices, the effects of the Ukraine-Russia conflict, which has resulted in higher fuel and energy costs globally, increases in interest rates, prolonged labour strikes and a high unemployment rate.
A further threat to South Africa’s economy is the number of companies that have closed in the aftermath of the COVID-19 pandemic. Data from Statistics South Africa show that business liquidations increased by 44.8% in the year to August 2022. The data also shows that in June 2022 there were 145 liquidations (compared to 132 in June 2021) and that the number of bankruptcies in South Africa increased to 165 in July 2022 and to 239 in August 2022.
