Johannesburg, South Africa – South Africa has witnessed a significant surge in business liquidations this year, with over 1,300 companies going under by the end of October.
According to data released by Statistics South Africa (Stats SA), the total number of liquidations decreased slightly year-on-year. However, October 2024 saw a sharp 44% increase compared to the same period in 2023.
Ntlhane Makena, Head of Insolvency, Restructuring, and Business Rescue Practice at ENS Africa, explained that the end-of-year spike in liquidations is a common trend influenced by both economic factors and human psychology.
“Companies often struggle to stay afloat, and as the year draws to a close, their efforts may prove futile, leading to a surge in liquidations,” Makena said.
He emphasized the importance of early intervention and proactive measures to prevent business failure. By addressing financial issues and restructuring operations promptly, companies can improve their chances of survival or secure better outcomes for shareholders and creditors.
“It’s crucial to take action early rather than clinging to a failing business,” Makena added. “By doing so, companies can potentially continue operations, maximize value for shareholders, or optimize returns for creditors.”
