The number of companies that have been liquidated this month has decreased by 7.7% compared to the same month last year, which results in a 11% decrease for the first quarter of this year.
The latest statistics published by Stats SA show that 168 companies were liquidated this month compared to 182 in March last year.
The liquidation, even at a reduced rate, comes in the face of a high unemployment rate and with many South Africans living in abject poverty. This is likely to add more gloom as the country struggles to navigate a difficult economic crunch that appears to be deepening with no respite on sight.
Based on the figures provided by Stats SA, companies in insurance, finance, real estate and business services were the most affected by liquidation for the past three months. A total of 61 businesses closed in these sectors leaving many people unemployed.
Trade, catering and accommodation businesses had 34 companies shutting their doors closing during the first three months of the year, while unclassified companies that were liquidated account for 43.
In January, 81 companies went under the hammer, and more businesses had to shut down in February with 162 closing their doors, bringing the total number of liquidated businesses to 411 this year.
Black Business Council (BBC) CEO Kganki Matabane bemoaned the liquidation numbers, saying they were concerning, adding that there were small, unregistered businesses that were closing.
“The situation is even worse as there are small businesses that are not listed in the official Stats SA report.
“Loadshedding and other cost of doing business, including interest rates and product prices were going up constantly. Small businesses cannot afford exorbitant prices of products and services, and this forces SMMEs to close shop,” he said.
Matabane said the BBC believes that the crisis of liquidation can be resolved once the issue of loadshedding is dealt with.
“The loadshedding crisis impacts badly on businesses as many enterprises incur costs of buying expensive generators and diesel, including investing in solar system.
“BBC always advocates for the government to deal with loadshedding crisis,” said Matabane.
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