Over 1,500 businesses liquidated in South Africa

South Africa saw 1,551 business shut their doors through liquidation processes in 2024—the lowest number of closures over the past seven years.

Stats SA recorded its final liquidation figures for the year, counting 90 liquidations in December 2024, down significantly from November and from the year prior.

The total number of liquidations decreased by 34.3% (from 137 to 90) in December 2024 compared with December 2023.

During this period, company liquidations decreased by 41 cases, and liquidations of close corporations decreased by 6 cases.

The number of liquidations also decreased by 6.4% in 2024 compared with 2023—and the quarter-on-quarter view was also positive, with closures decreasing by 0.7% in the fourth quarter of 2024 compared with the fourth quarter of 2023.

The latest data shows a continued downward trend in liquidations over the past few years after cases peaked in 2019.

As has been the general trend over the years, the businesses hardest hit by liquidation are those in the financing, insurance, real estate, and business services sectors.

This is followed by trade, catering and accommodation, community, social and personal services.

The construction and manufacturing sectors also had a difficult year, though liquidations in those sectors did not enter into the triple digits.

While liquidation numbers were down in 2024, there are a number of high-profile businesses that shut down during the year.

This includes the likes of Ellies—a well-known brand for consumers—solar providers and even clothing brands. Several other companies faced liquidation but managed to turn their fortunes around through business rescue processes.

This includes well-known brands like West Pack and Autozone.

Overall, though, 2024 proved to be a much better and positive year for businesses in South Africa, largely thanks to the extended (and continued) suspension of load shedding, as well as a turn in sentiment towards the country following the national election.

The establishment of the Government of National Unity has lifted business, consumer and investor confidence in the country, and economists, analysts, and other market experts expect the positivity to continue as the new government pursues much-needed reforms.

However, this is a slow process, and it does not mean that all is sunshine and rainbows.

South Africa is still trying to recover from the ghost of load shedding, with many businesses still picking up the pieces of what happened in 2022/23.

Further, the GNU’s reforms still need to address multiple crises, including electricity. The logistics sector still needs to shift into gear, as do reforms to deal with crumbling water infrastructure.

Over and above all of this, the local governance problems, where entire towns and municipalities are collapsing, and taking many small businesses with them.

Putting this into context, despite the overall better business environment in 2024, economists don’t expect GDP to grow much more than in 2023, when load shedding was at its worst.

Current projections from the International Monetary Fund (IMF) show South Africa’s GDP growing only 0.8% in 2024 (versus 0.7% in 2023).

Prospects for 2025, however, look far better. Current projections are for the economy to continue performing better, and GDP growth to hit upwards of 1.5%.