Study finds South Africa's SME failure rate exceeds peers amid funding gap
What happened
A study commissioned by British International Investment and Swedfund found that black-owned and led businesses in South Africa face a funding gap of $45bn, which is more pronounced than in Nigeria, Kenya, Ivory Coast, and Senegal. The report attributes this to a combination of historical and structural factors, including the legacy of apartheid on business ownership and access to capital.
From businessday.co.za
Why it matters
The findings highlight unintended consequences of Broad-Based BEE (B-BBEE) policies, such as non-South African black founders being unable to benefit from the frameworks. Additionally, Donald Trump has pressured South Africa to scrap its redress policies.
From businessday.co.za
Who's involved
- South AfricaThe country where the SME failure and funding gap were studied.
- SwedfundOne of the institutions that commissioned the study.
- Donald TrumpThe politician pressuring South Africa to scrap redress policies.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- South AfricaSpeculative
South Africa's core economic stability might be impacted by the pronounced SME failure and $45bn funding gap.
- National TreasurySpeculative
National Treasury might need to address the $45bn funding gap and potential policy shifts resulting from external pressure.
Keep exploring
The entities involved
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South Africa
country in southern Africa
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Kenya
country in Eastern Africa
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Nigeria
sovereign state in West Africa
Related events
- Nigeria's economic reforms have led to significant gains in investability rankings, allowing it to overtake several African nations.
- A collection of economic developments regarding South Africa's status (credit rating, FATF status, growth outlook) influenced by international bodies (World Bank, FATF, S&P Global) and geopolitical factors (Middle East conflict, Sub-Saharan Africa average).
- Due to geopolitical tensions involving US-Israeli strikes on Iran, the Strait of Hormuz is disrupted, leading to fuel price hikes and supply chain issues affecting Africa, including Kenya and Ethiopia.