Abdul Vally, CEO of Coface South Africa

South Africa’s corporate sector continues to operate under sustained financial pressure, despite a modest decline in business liquidations relative to the previous year. The latest Statistics of Liquidations report released by Statistics South Africa (Stats SA) shows that 135 businesses were liquidated in February 2026, down from 140 liquidations in February 2025, representing a 3.6% year‑on‑year decrease. The data indicates that liquidations of close corporations declined during the period, while company liquidations increased slightly.

Mounting pressures: why businesses are failing

The liquidation data reflects the cumulative impact of high interest rates, weak demand, infrastructure constraints, logistical challenges, and external pressures. These factors continue to erode margins and restrict cash flow, particularly for small and medium‑sized enterprises. Sectors that are more fragmented and/or have a large population of SMEs account for a significant share of liquidations. These include finance, insurance, real estate, business services, trade, catering, and accommodation services.

Unpaid debt remains a critical trigger

Unpaid invoices and delayed payments remain a major contributor to business failure. In many cases, the default of a single large debtor can place otherwise viable businesses under severe financial strain, accelerating the path to liquidation.

How businesses can reduce liquidation risk

Proactive credit risk management remains one of the most effective tools available to businesses operating in uncertain conditions. Trade credit insurance and business information solutions help companies protect cash flow, reduce exposure to non‑payment, and make informed credit decisions.

“In periods of economic strain, businesses that actively protect their income streams are far better positioned to survive and recover,” says Abdul Vally, CEO of Coface South Africa.

Trade credit insurance enables businesses to extend credit with greater confidence in both domestic and international markets by protecting against losses arising from unpaid trade debts.

Economic outlook: fragile confidence

While the February liquidation figures show a modest improvement, broader economic indicators continue to reflect fragile business confidence. This reinforces the importance of disciplined risk management, early intervention, and data‑driven decision‑making as South African businesses navigate ongoing uncertainty.

The full report is available here.