The record increase in business closures negates the gains that have been made in the transformation of the country’s economy. This is based on recent data from StatsSA which indicates that 49% more businesses have been liquidated from March 2020 to March 2021.
What should be of great concern is that amongst the liquidated businesses are are black-owned small and medium enterprises, who had been engaged as suppliers of goods and services to liquidated companies as part of Enterprise Development. From this viewpoint, the permanent closure of business is a big setback to meeting the national objective of economic transformation.
The total number of liquidations increased by 18.9% in the first quarter of 2021 compared with the first quarter of 2020, StatsSA says. Of all sectors, financing, insurance, real estate, business services (77 liquidations), trade, catering, and accommodation (47), and manufacturing (10) are the hardest hit.
The total number of liquidations increased by 18.9% in the first quarter of 2021 compared with the first quarter of 2020, StatsSA says. The Statistics of Liquidations and insolvencies report confirms shows that 216 companies liquidated in March this year, compared to 178 the month before – a 21% jump, almost 50% higher than March last year.
