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Business in South Africa 2019


Business in South Africa 2019

What does 2019 hold in store for businesses in South Africa?

Unfortunately, no one has a crystal ball and there are many different opinions. What we know is that South Africa is currently experiencing a technical recession. Some experts are indicating that the country may come out of this recession in the first half of 2019 and others are more pessimistic. The IOL Business Report on 28th November 2018 states that business confidence has dropped to its lowest level since the second quarter of 2017.

The main factors that are affecting the South African economy are local political uncertainties and the world economy, especially the emerging markets. The South African economy is heavily influenced by what happens in the rest of the world and there certainly is a lot of political uncertainty and volatility in politics and economies worldwide.

On the local front, the political uncertainty is likely to last until the 2019 elections which are likely to happen mid-year. It must be remembered that even if the outcome of these elections bodes well for the economy, the effects will not be felt immediately. There may be a short repeat of a Ramaphoria type effect, but it will take time for the turnaround to happen. Turning the economy of a country around is a little like turning around a large ocean liner, it will take time.

There are many ‘bogeymen’ out there that give cause for concern. The impact of climate change should not be ignored and, as an emerging economy, South Africa is very vulnerable. In South Africa, the extreme income inequality does not seem to be improving which, along with an alarmingly high unemployment rate, are all triggers for social unrest and which in turn impact growth and investment. The state of a few public utility companies such as Eskom is in a bad way. An article in Independent Online is reporting that Eskom is close to collapse.  The Rand as a currency is extremely volatile, however, it is interesting that it is amongst one of the world’s most traded currencies. However, for businesses importing goods, its volatility is a major problem. There are issues such as Brexit and the US and China trade wars that will all have their impact. In fact, something called The Butterfly Effect, which is the fact that a small event somewhere in the world can have major ramifications in global markets is something that needs to be borne in mind.

So in a nutshell, the bottom line is that 2019 is unknown territory and that there are many local and international influences that could affect the South African economy. Undoubtedly there will be many opportunities, but there are also many risks. There is much to be said for strengthening local markets and industries to improve the stability of the economy but we cannot operate in isolation from the rest of the world.

What can a South African business do to prepare for these factors?

It is important to run a tight ship. The business owner or manager needs to pay attention and keep alert to all aspects of the business at all times. Missing a small detail or not having all the facts can cause problems down the line. It is not a case of micromanaging but of ensuring that the correct controls are in place and information is accurate, current, and easily available.

Human Resources

Staff form an important role in most businesses and it is important to manage this resource well. It is vital that human resources are well utilised but it is also important to ensure that employees are treated fairly and with respect. Employees look for job satisfaction which is not all about remuneration but also about recognition, respect and being part of a team. High staff turnover is a major cost to a business as well as reducing efficiency and continuity.


Having a budget or financial plan and adhering to it is important. The finances of the business are critical and budgeting and monitoring costs help keep long term goals and targets on track. This means, amongst others, watching operating costs, managing stock holding, and sourcing good quality stock at the best price. Paying attention to the details is important and having a good accounting and ERP software system is an invaluable tool.

Customer Service

Doing everything to keep your customers should be a golden rule and every employee should strive to keep this rule. Customer loyalty is not always about price. In this day of impersonal giant corporates, customers value good, personal customer service very highly. This means constantly communicating with your customers, keeping appointments, providing quotes quickly, and providing good after-sales service. Establishing a trust relationship with your customers is vital.

Focusing on Core Business

Focusing on your core business is crucial. It is important to identify what your core business is and what your strengths in this regard. Diversification can be very advantageous and of great benefit but it is also true, that being too diversified means that resources are diluted and profitable areas receive too little attention, and less profitable areas receive too much. The old saying ‘jack of all trades and master of none’ still holds true. Diversification should be something that happens when there is a strong and stable foundation already in place.


It is also important to stay flexible and adaptable. The ability to learn from your mistakes and to be able to implement a change of direction is very valuable traits. The marketplace and conditions are constantly changing and evolving and a business has to be able to identify what is not working and to make changes. It is vital to have the correct information in order to identify the problems and it takes courage and ingenuity to make the changes.

Online Presence

Finally, it is becoming ever more important to have an online presence. Customers are increasingly using the internet to research products and services. A business needs an online presence to impart information about itself and its products and services. A website needs to be constantly kept up to date and interesting and use can also be made of social media platforms. If enquiries can be actioned from the web site it is vital that these are responded to timeously. Ignoring this kind of online enquiry is much like not answering the telephone.


In conclusion, it is likely that 2019 will be a challenging year, with the possibility of some major changes both at home and abroad. In order to navigate through these uncertain times, a business needs to be well managed, informed, and on the alert, not only for problems but also for opportunities.

“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”

– Charles Darwin

“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

– Theodore Roosevelt