South Africa heads into 2026 on a firmer economic footing than in recent years, with a steadier macro backdrop and modest growth prospects beginning to take shape. That should be positive for the country’s small business sector, which picked up some momentum in the second half of last year off a low base, as sentiment improves and confidence returns in a measured, cautiously optimistic way rather than with outright bullishness.

It comes as a welcome breather for a sector that accounts for the bulk of formalised businesses and employment in the country, one which has spent the years since the Covid-19 pandemic contending with persistent headwinds and rising cost pressures that have steadily squeezed its room to grow.

January arrived with fuel costs at their lowest in almost four years, more than 200 days without load-shedding, a rand trading below 17 to the dollar for the first time since 2023, and interest rates at their lowest since 2024.

If those conditions hold, or even stabilise around current levels, they will ease operating pressure materially and make it more attractive for businesses to consider funding and expansion again, two areas that have been among the most persistent constraints for small businesses.

Source: SA Profile Magazine