SMES under pressure as business confidence hits four-year low in South Africa

As South Africa’s business confidence hits a four-year low, concerns are mounting over the long-term viability of small and medium-sized enterprises (SMEs) that are already navigating power cuts, funding constraints, and rigid red tape.

David Uwah, a prominent advocate for economic transformation and former Chair of the Black Management Forum, says the slowdown reflected in the recent PMI data is playing out in real time across the country’s business landscape—especially in second-tier cities and townships.

“SMEs are the bedrock of any economy’s growth… but in South Africa, they’re weighed down by infrastructure failures, corruption, and a lack of access to funding,” Uwah said. “Strict red tape and compliance regulations have made many businesses despondent.”

With many Black-owned SMEs relying heavily on government contracts, Uwah stressed the need for diversification and sustainable income streams.

“I’ve always advocated for SMEs to channel profits into sectors like agriculture, property, manufacturing and franchising,” he noted. “That way, we not only create jobs but also ensure long-term business sustainability.”

Uwah also called on the government and corporate players to remove policy barriers, invest in township economies, and offer financial access and security for local entrepreneurs.