Liquidation Across South Africa Still Worrisome Possibility to Expert

Meanwhile, voluntary liquidations have fallen, debts being paid at higher rate

The liquidation of Cosira, a structural steel contractor has shown an emblematic concept that is cripplings plaguing the business environment as a whole. With the demise of the First Tech group and subsidiaries, it is likely on a portion of the jobs and industry revenue that will be lost in the folding.

The high-profile collapse illustrates that South Africa is still not fully escaping the concerns that have plagued the economy for some time now. The overall business environment remains somewhat bleak, despite some improvements in needed areas, according to senior economist of Credit Guarantee Insurance, Luke Doig.

Despite the bleakness of such concepts, three has actually been a decline in the compulsory liquidation over the last year, from 1,468, down to 1,364. That tally notes a 7.1% decrease overall.

Meanwhile, debt has fallen by 20.8% over the first five months of the year, when compared to the year prior. “These figures belie the true operating environment for business,” says Doig.

One example he gave, the value of judgements has seen a rise from R400.7m within the first five months of 2012. That constitutes a 30.7% rise, and Credit Guarantee claims that it was paid totals this year climbed to 60.8%

Liquidation has continued to occur in strategic industries as well. Areas like mining and manufacturing, as well as basic construction, business, and wholesale/catering, have all seen has quality declines in such liquidation.

According to Doig, at least partial credit can be granted to the the business rescue that has been in play since 2011.

“Our business rescue work is up 116% from last year,” says Doig. “However the numbers are not published as regularly as the Stats SA numbers so it is difficult to keep our fingers on that pulse or to keep track of successes.”


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