Sharp Decline Alert: Liquidations Plummet by 13.3% Year on Year

• Facing a stagnant economy and soaring inflation, certain businesses in South Africa find themselves compelled to close their doors permanently
• Despite a decline in liquidations, November 2023 posed challenges, as evidenced by various economic indicators
• The manufacturing sector activity and export potential in October were hampered by challenging global conditions and significant domestic issues

In the midst of a challenging economic environment in South Africa, recent statistics from Stats SA have revealed both alarming and hopeful trends, offering a nuanced perspective on the country's financial landscape in November 2023.

In November, 144 businesses ceased operations, bringing the total closures for the year to approximately 1 500, according to data from Stats SA. The overall number of liquidations recorded a 13.3% decrease in November compared to the same month in 2022.

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Speaking to eNCA, economist Phelisa Nkomo says that this is a worrying trend that South Africa is seeing.

"Closure of businesses indicates that it can have several ripple effects on the economy, impacting various stakeholders and contributing to broader economic dynamics. It is quite clear that South Africa is struggling."

Challenging period of November 2023

Despite the year-on-year decrease in liquidations, various economic indicators indicated that November presented a challenging month.

Nevertheless, the prices of food and non-alcoholic beverages reached a four-month peak of 9.0%, while meat inflation increased by 0.1% to reach 3.5% in November.

The avian flu outbreak persisted in causing disruptions in the poultry market. Stats SA reported that the annual rate for IQF (individually quick-frozen) chicken rose to 7.3% in November, compared to 5.5% in October.

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Concerns in SA as government finances face uncertainty

Previously, Briefly News reported that President Cyril Ramaphosa dismissed claims of the country being broke, countering Finance Minister Enoch Godongwana's budget cut announcement, which raised concerns about potential impacts on health services in the Western Cape. Despite these fears, many South Africans believe the government is on the brink of financial strain.

The National Treasury has advised departments across the country to exercise strict control over expenditures, highlighting the nation's diminished revenue.

Source: Briefly News