The gloomy economic climate that this country has grappled with for some time now is a key factor in the large number of liquidations in the Bay since 2017 – and these are sure to continue amid the considerable anxiety load-shedding has been inducing among business owners.
We report today that an average of three companies a month – 72 in total – were forced to go into liquidation in the Bay from January 2017 to December 2018.
The figure relates to privately owned companies and close corporations, and does not even include sole proprietorships and trading trusts, which means the actual number may well be even higher.
Nationally, the total number of liquidations increased 37.6% from January 2018 to January 2019, according to Stats SA, which goes to show this is far from just a Bay problem.
Liquidation is a devastating process for any business owner to go through. Besides the impact on their loved ones and financial situation, some will no doubt also be consumed by the tremendous guilt of seeing loyal staff members of many years left without the means to support themselves and their families.
The local construction industry has been particularly hard hit, with long-established companies such as Masakeni Construction, Speyers Construction and, most recently, Omega Civils, all folding and leaving hundreds of people without jobs – this in a city where unemployment is already at 36.9%.
The power crisis is just the latest burden on businesses, which have already had to contend with a VAT increase, and ever-rising fuel and electricity costs.
It is imperative that some sort of plan to halt load-shedding is found as soon as possible, as it is enormously detrimental to smaller businesses in particular, which simply do not have the money for generators and alternative sources of power.
Failing that, we can expect many more enterprises to either shed jobs or close up shop altogether.