What South Africa's small businesses can expect in 2026

SOUTH Africa heads into 2026 on firmer economic footing than in recent years, with a steadier macro backdrop and modest growth prospects beginning to take shape.

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THE country's small business sector, which picked up some momentum in the second half of last year off a low base, says the author.

(AI LAB)

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, even 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, and which has spent the years since the pandemic contending with persistent headwinds and rising cost pressures that have steadily squeezed its room to grow.

January arrives 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.

According to the Small Business Growth Index (SBGI), South Africa's first real-time barometer tracking the conditions shaping small business per-

formance, only 38% of businesses surveyed in 2025 believed they could survive for more than a year under cost pressures without external support.

Those pressures were concentrated around input costs, energy reliability, and the broader economic environment, with many respondents pointing to the need for government action that reduces administrative friction and provides relief from energy-related costs.