South Africa’s economy is under growing strain, with 109 business liquidations recorded in April 2025 alone, bringing the total number of closures for the year to 482, according to new data released by Statistics South Africa (Stats SA).

The country is grappling with a steady rise in business failures, as April’s figures mark a 13.2% increase in liquidations compared to the same month in 2024, underscoring the mounting difficulties faced by local enterprises.

The Stats SA report shows a 25.7% year-on-year rise in voluntary liquidations, where business owners themselves choose to shut down operations.

Meanwhile, compulsory liquidations, those initiated by creditors due to unpaid debts, fell by 29.4%.

This trend suggests that more entrepreneurs are making the decision to exit the market preemptively, rather than being forced out through legal proceedings.

A range of economic challenges is contributing to this surge in closures.

High interest rates have made financing more expensive, while consumer demand remains weak, squeezing revenue and profitability.

Rising operational costs, ongoing power cuts due to load shedding, and energy insecurity are forcing many businesses to rely on costly backup solutions such as generators.

Transport and logistics expenses are also up, placing additional pressure on already strained resources, particularly for small and medium-sized enterprises.

The Small Business Institute says the latest numbers reflect a worsening business climate.

“Many companies simply can’t keep going under these conditions,” the institute noted, pointing to a deepening vulnerability among businesses operating in an increasingly fragile environment.

External political developments have added to the strain.

BusinessTech reports that President Donald Trump’s new trade policies are fueling uncertainty among South African companies.

On April 5, Trump imposed a global 10% tariff, followed by a more targeted round of “reciprocal” tariffs aimed at specific countries, including South Africa.

Dubbed the “Liberation Day” tariffs, the second round has been paused temporarily for 90 days, but the broader implications remain.

Washington’s tougher trade stance came in the wake of ongoing land reform debates in South Africa, which have drawn criticism from the U.S. and led to a further souring of relations.

Trump’s tariff moves have sent ripples through global markets, prompting many South African businesses to shelve investment plans and take a wait-and-see approach amid heightened geopolitical tension.

With economic pressures coming from both domestic instability and external trade shocks, the rising number of liquidations signals a pressing need for targeted interventions to protect vulnerable sectors.

As 2025 progresses, the closure of nearly 500 businesses in just four months serves as a clear warning of the deepening challenges facing South Africa’s economy.