Open for business? A review of the SMME landscape in South Africa

This report is a collaboration between the Centre For Risk Analysis (CRA) and Agis, a strategy and economic-development consulting firm active throughout Africa and an investor in three SMMEs.
Open for business? A review of the SMME landscape in South Africa

The report is presented in three sections. In the first section, the CRA presents high level data on SMMEs in South Africa. In the second section, Rolf Endres and Boikanyo Mothibatsela of Agis share their insights into the opportunities and challenges facing small businesses operating in SA. The final section of the report showcases the joint policy recommendations of the CRA and Agis.

Key takeaways:

  • There are roughly 2.55 million ‘SMME owners’, a proxy measure for the number of SMMEs in South Africa.
  • SMMEs account for approximately 98.5% of formal firms, but only 28% of jobs.
  • Some 74.5% of SMME owners are Black, 4.3% are Coloured, 4.5% are Indian/Asian and 16.7% are White.
  • SMMEs are caught in a cycle of limited bargaining power, cash flow constraints, significant skills and resource gaps and a taxing regulatory environment.
  • On average, 31 companies with taxable income of less than R10 million close down each week.
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