SA’s weak economy favours medium-sized companies

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Government has started a process of reopening the SA economy in a gradual process.
Government has started a process of reopening the SA economy in a gradual process.

South Africa’s medium-sized businesses have generally proven to be more resilient to the prolonged weakness in the economy and are more likely to successfully weather the fallout from the lockdown than their smaller or larger counterparts.

According to research by the small business development department, between 2008 and 2016 the contribution of small and very small businesses to South Africa’s GDP fell by 13%, while the contribution by medium and large businesses rose by 6%.

The smaller companies, those with revenues of R20 million to R100 million, are often sub-scale. Many are profitable, but they are only generating enough profits to look after their private shareholders, not enough to provide the working capital they need to grow to their full potential.

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