Business
Nearly 100 South African businesses shut down in first month of 2026
The year has barely begun, yet almost 100 South African businesses have already shut their doors.
According to the latest figures from Statistics South Africa, 96 businesses were liquidated in January 2026. It is a sobering number at first glance, particularly for entrepreneurs still navigating high operating costs, cautious consumers, and an economy that has felt fragile for years.
But as always with economic data, the real story sits beneath the headline.
A slight improvement on last year
While 96 closures sound alarming, it is actually lower than the same period last year. In January 2025, 106 businesses were liquidated. That means 10 fewer companies shut down this time around, a 9.4 percent decline year on year.
Over a broader three-month period, from November 2025 to January 2026, liquidations were 0.6 percent lower than during the same stretch a year earlier. It is not a dramatic turnaround, but it does hint at a slightly steadier start to 2026.
For a country that has endured years of rolling blackouts, logistical bottlenecks, and inflationary pressure, even marginal improvement can feel significant. On social media, the reaction has been cautious rather than celebratory. Many business owners point out that survival does not necessarily equal growth. Still, the numbers suggest the tide may not be worsening.
Which sectors were hardest hit?
The closures were concentrated in the finance, insurance, real estate, and business services sector, which accounted for roughly a quarter of all liquidations. Trade, catering, and accommodation followed.
That second category is particularly close to home for many South Africans. Restaurants, guesthouses, and small retail outlets remain sensitive to shifts in disposable income. After a challenging festive season for some operators, January is traditionally tight.
Not all liquidations mean collapse
Here is where the nuance matters.
Around 85 percent of the liquidations recorded were voluntary. In January 2026, 86 businesses chose voluntary liquidation, almost unchanged from 87 in January 2025. Only 10 were compulsory liquidations, down from 19 a year earlier.
Compulsory liquidation is typically court-ordered and often linked to insolvency or creditor action. Voluntary liquidation, on the other hand, can happen for strategic or transactional reasons. A company might restructure, close a dormant entity, or wind up operations as part of a broader corporate move.
In other words, liquidation does not automatically mean financial ruin. The data does not track the specific reasons behind each closure, so it offers only part of the picture.
The role of business rescue
Since 2011, companies in South Africa have had the option of entering business rescue instead of moving straight to liquidation. Business rescue aims to rehabilitate financially distressed companies and keep them operating where possible.
As more firms turn to this route, it may reduce the number of outright liquidations recorded. However, business rescue data is managed separately by the Companies and Intellectual Property Commission, which means the liquidation figures alone do not capture the full state of corporate distress.
There is another layer to consider. Statistics South Africa sources liquidation data from administrative records provided by the CIPC and the Department of Trade, Industry and Competition, drawing from the Master’s Office. The agency has confirmed that it is working with the CIPC on a revised version of the liquidation statistics.
The methodology has shifted before. Insolvency data was previously tracked alongside liquidations but was discontinued following disruptions during the COVID-19 period. For now, only liquidations are reflected, which limits the scope of what can be inferred about the broader business climate.
Image 1: Business Tech
Image 2: Business Tech
A cautious but steadier start
So what does all this mean?
The numbers point to a slightly improved start to 2026, particularly given the drop in compulsory liquidations. That aligns with other indicators suggesting business sentiment has stabilised somewhat.
Yet 96 closures in a single month are still a reminder that the operating environment remains tough. Access to capital, energy reliability, and consumer confidence will continue to shape how the rest of the year unfolds.
For entrepreneurs watching these figures closely, the message is mixed. There is reason for cautious optimism, but no room for complacency. South Africa’s business landscape remains in transition, and the statistics tell only part of the story.
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Source: Business Tech
Featured Image: Scrolla.Africa
