society
Why Businesses Fail in South Africa. By Ekos Akpokabayen
Why Businesses Fail in South Africa.
By Ekos Akpokabayen
South Africa, like many emerging markets, experiences a high rate of business failure, particularly among small and medium-sized enterprises (SMEs). Statistics from the Small Enterprise Development Agency (SEDA) and the Global Entrepreneurship Monitor consistently reveal that over 70% of small businesses fail within the first two years of operation. This trend is concerning given that SMEs are vital contributors to economic growth, job creation, and innovation.
As a finance professional and Chief Investment Officer at Ovid Capita, I have closely observed the structural and operational challenges facing businesses in South Africa. Drawing from both analytical frameworks and on-the-ground experience, I will explore the critical reasons businesses fail and offer pragmatic advice to entrepreneurs aspiring to build resilient and sustainable enterprises.
1. Lack of Market Understanding and Strategic Positioning
One of the foundational causes of business failure is inadequate market research and poor strategic positioning. Too often, entrepreneurs are guided by passion, anecdotal evidence, or fleeting market trends rather than grounded, data-driven insights. While enthusiasm is essential, it must be paired with a thorough understanding of customer needs, behavioral patterns, and competitive dynamics.
A robust market analysis should answer essential questions: Who are our customers? What do they value? Who else is serving them, and how can we do better? Unfortunately, many business owners overestimate demand or misjudge pricing sensitivities, resulting in products or services that fail to gain traction.
To thrive, entrepreneurs must prioritize feasibility studies, competitive analysis, and customer validation exercises. Without this due diligence, they risk entering saturated markets, pricing incorrectly, or offering products with no long-term demand.
2. Weak Financial Management and Planning
Financial mismanagement remains one of the most persistent causes of business collapse. Many entrepreneurs lack fundamental financial literacy—unable to distinguish between profit and cash flow, or between gross margins and net income. This lack of understanding leads to poor decision-making, uncontrolled spending, and an inability to budget or forecast.
A successful business must implement sound accounting practices, establish clear financial controls, and adopt budgeting processes that align with strategic objectives. Entrepreneurs should leverage modern accounting software and, where possible, seek guidance from professional advisors or financial consultants.
Moreover, understanding unit economics—how much it costs to acquire a customer versus the lifetime value of that customer—is critical. Without these insights, even high-revenue businesses can fail if their cost structures are inefficient or unsustainable.
3. Cash Flow Constraints and Insufficient Capitalization
Cash flow—the lifeblood of any enterprise—is often misunderstood. Many business owners confuse profitability with liquidity, only to find themselves unable to cover operational expenses such as rent, payroll, or inventory.
This issue is compounded by a failure to raise capital at the right time. In South Africa’s volatile economic climate, unforeseen disruptions—such as load shedding, regulatory changes, or currency volatility—can quickly derail undercapitalized businesses.
Entrepreneurs must adopt a proactive approach to financial planning that accounts for seasonal fluctuations, delayed client payments, and potential economic shocks. Building a capital buffer and securing access to credit or investment capital can significantly increase a business’s resilience.
4. Underestimating the Competitive Landscape
South Africa’s business environment is dynamic and competitive. Many new entrants mistakenly believe their offerings are unique or that existing competitors are unsophisticated. This assumption is often misguided.
Competitor analysis is not a one-time event—it should be an ongoing process. Understanding the pricing models, service delivery mechanisms, customer retention strategies, and marketing approaches of competitors can offer valuable insights for differentiation and strategic agility.
Those who ignore competition risk being undercut on price, outpaced in innovation, or simply forgotten by consumers in a saturated market.
5. Inexperience in Hiring and Managing Talent
Even the most innovative ideas require strong execution—and that depends heavily on people. Unfortunately, many entrepreneurs lack experience in human resource management. Hiring based on convenience, cost, or personal relationships instead of merit and cultural fit can lead to operational inefficiencies and internal discord.
Effective recruitment is not just about filling roles; it’s about building a team that shares the vision, values, and ambition of the enterprise. Furthermore, poor leadership, lack of delegation, and micro-management often demotivate high-performing employees, leading to high turnover and loss of institutional knowledge.
Investing in people—through careful recruitment, team building, and leadership development—is essential to business sustainability.
6. Neglect of Employee Training and Development
In a fast-evolving economic landscape, businesses must constantly adapt to changes in technology, consumer behavior, and regulatory frameworks. Yet, employee training is often seen as a cost rather than an investment.
This mindset is dangerous. Inadequately trained staff can negatively impact customer satisfaction, productivity, and compliance. Conversely, continuous professional development fosters innovation, efficiency, and loyalty.
Entrepreneurs must create a culture of learning. This can be done through formal training programs, peer learning, mentorship initiatives, and access to industry certifications. Knowledge is a competitive advantage—and businesses that invest in human capital tend to outperform their peers.
7. Failure to Build Strategic Networks and Partnerships
In South Africa, many entrepreneurs operate in isolation. They overlook the value of business networks, industry associations, and collaborative ecosystems. However, successful businesses are rarely built in a vacuum.
Networking provides access to partnerships, funding opportunities, mentorship, and market intelligence. Engaging with other business owners, attending industry conferences, or joining business chambers can open doors that would otherwise remain closed.
Moreover, strategic alliances—whether for distribution, marketing, or product development—can reduce costs, increase market reach, and accelerate growth.
Conclusion: From Vulnerability to Viability
The entrepreneurial journey in South Africa is not for the faint-hearted. The economic landscape presents both opportunities and obstacles, and while many businesses begin with promise, too few survive long enough to reach their full potential.
To reverse this trend, entrepreneurs must shift from reactive to strategic thinking. They must invest time in market research, build solid financial foundations, plan for cash flow disruptions, and hire with intentionality. Furthermore, cultivating talent, embracing lifelong learning, and fostering collaborative relationships can significantly enhance business longevity.
At Ovid Capita, we advocate for an integrated approach to entrepreneurship—one that combines passion with planning, and innovation with execution. With the right guidance, tools, and mindset, South African entrepreneurs can overcome the systemic barriers that currently hinder SME growth and unlock the full potential of their ventures.
By addressing these avoidable pitfalls and embracing best practices, we can build a stronger, more inclusive, and sustainable business ecosystem that not only drives economic transformation but also uplifts communities across the country.
Ekos Akpokabayen has an MSc in Finance, and also the Chief Investment Officer at
Ovid Capita
GOVERNMENT MUST TACKLE NATION’S PRESSING CHALLENGES — BISHOP MARTINS URGES AT CHRISM MASS
By Ifeoma Ikem
The Holy Cross Cathedral, Lagos, was filled with joy, reverence, and renewed commitment on Holy Thursday as Catholic faithful across the metropolis gathered for the annual Chrism Mass — a solemn celebration marking the institution of the priesthood, the Holy Eucharist, and the blessing of sacred oils used throughout the liturgical year.
During the ceremony, the Catholic Archbishop of Lagos, Most Rev. Adewale Martins, described the Chrism Mass as a profound moment in the life of the Church.
He noted that it offers priests an opportunity to renew their vows and reflect on the centrality of the Eucharist, which he emphasized remains the heartbeat of the Catholic faith.
Addressing national issues, Bishop Martins acknowledged the government’s ongoing efforts to tackle Nigeria’s current challenges.
However, he stressed the need for more decisive and accelerated interventions, particularly in securing lives and easing the economic burdens confronting citizens.
He congratulated priests on their feast day and reflected on the rising influence of digital evangelization. While recognizing that many people now “inhabit online spaces,” he warned clergymen to handle social media with caution, discipline, and fidelity to Church teachings. According to him, digital influence must never overshadow spiritual integrity.
“The oils blessed today are not simply symbols; they speak of being set apart by a mark not earned, not crafted, but given,” he said. “As we renew our promises, we do not recreate ordination; we awaken memory. We were not ordained to build profiles but to bear Christ.”
He further noted that the digital world has become a place where people “gather, argue, celebrate, confess, misunderstand, and sometimes encounter truth.” For this reason, he said the Church recognizes the need to take the Gospel into that space without compromising its authenticity.
In his homily, Rev. Fr. Paul Akin-Otiko, Chaplain of St. Thomas More Catholic Chaplaincy, University of Lagos, emphasized the enduring significance of the Chrism Mass as an ancient tradition where sacred oils are consecrated.
He urged priests to pray fervently for the sick using the blessed oils, reminding them that true healing comes from God.
Fr. Akin-Otiko encouraged clergy to remain selfless, warning them never to turn the Church into a source of personal gain.
He stressed that their primary duty is the salvation of souls and the welfare of the people entrusted to them.
Monsignor John Aniagwu took a moment to appreciate Anthony Cardinal Olubunmi Okogie for his fatherly guidance and exemplary leadership. He prayed for God’s continued blessings, asking that all present be granted good health to witness many more Chrism Masses.
The highlight of the ceremony was the renewal of vows by hundreds of priests, who reaffirmed their commitment to lives of dedication, chastity, and obedience to the Church and their bishop — an act that drew heartfelt applause from the congregation.
The celebration concluded with songs of thanksgiving, joy, and renewed devotion.
society
Liberian Leaders, Citizens Bear Witness as Apostle Suleman Hosts Two-Day Power-Packed Crusade
Liberian Leaders, Citizens Bear Witness as Apostle Suleman Hosts Two-Day Power-Packed Crusade
It was testimonies galore on Tuesday, March 31, the first day of the famous servant of God and founder of the Omega Fire Ministries (OFM) worldwide, Apostle Johnson Suleman’s power-packed two-day crusade. The event documented impactful moments with the Gospel and miracles, emphasizing the power of faith and the tangible confirmation of God’s Word through signs and wonders. It was equally an atmosphere of miraculous healing, restoration of lives, and the strengthening of faith.
At the crusade, which was held at the SKD Sports Stadium in Paynesville City, and themed, “Liberia Outpouring Crusade” witnessed testimonies of impact and miracles with participants experiencing instant healing of various kinds of challenges.
Apostle Suleman’s first port of call was Paynesville, the office of Liberian government’s president, Mr. Joseph Nyuma Boakai, who received him in an audience with his junior ministers. Apostle Suleman, who also met with the vice-president, Mr. Jeremiah Kpan Koung, was welcomed by the Liberian leader’s office as part of the president’s ongoing engagements with religious leaders aimed at fostering spiritual support for national development.
The president expressed profound appreciation to Apostle Suleman for the visit and continued prayers and intercessions by men and women of God on behalf of Liberia, emphasizing his firm belief that sustained spiritual guidance and prayer remain vital to the transformation and progress of the nation.
During the visit, Apostle Suleman offered prayers for President Boakai, his cabinet and the Liberian nation, invoking divine alignment, wisdom, and insight in Liberia’s path toward growth and stability. He prayed that the Almighty God would position Liberia for relevance and fulfillment of its national destiny.
Apostle Johnson Suleman, an evangelist who knows no bounds of where preaching the gospel comes to a stop, visited Liberia prepared with the message, compelling power of the Gospel and the work of the Holy Spirit, and bringing people to a point of decision where they surrendered their lives to Christ.
Aside from being prophetic and timely, OFM sources disclosed that the servant of God’s visit underscores the importance of faith-based partnerships in supporting governance and national renewal efforts.
society
Middle Belt Forum Hails Tinubu’s Jos Visit, Calls for United Civil-Military Effort to Restore Lasting Peace
*Middle Belt Forum Hails Tinubu’s Jos Visit, Calls for United Civil-Military Effort to Restore Lasting Peace
The Middle Belt Peace Forum (MBPF) has commended President Bola Ahmed Tinubu for his profound demonstration of empathy and responsive leadership following his decision to postpone an official engagement in Iperu in order to visit victims of the recent attacks in Jos.
In a statement signed by its National Coordinator, Pastor Bulus Garba, in Jos on Friday, the Forum said the President’s decision to personally identify with grieving communities sends a powerful message of solidarity and reinforces public confidence in the commitment of the Federal Government to the protection of lives and property.
“The Middle Belt Peace Forum warmly commends President Bola Ahmed Tinubu for prioritising compassion over ceremony. At a time of deep sorrow for the people of Plateau State, his decision to visit Jos stands as a mark of true leadership—one that listens, responds, and stands with the people in their moment of pain,” the statement read.
The Forum described the perpetrators of the recent attacks as “cowards who prey on innocent and defenceless citizens,” stressing that such acts of violence are not only inhumane but also a direct assault on the unity and peace of the nation.
“We condemn in the strongest terms the actions of these cowardly attackers whose only aim is to instil fear and destabilise peaceful communities. Their actions must be met with firm and decisive resistance from all arms of the state,” Pastor Garba said.
The MBPF further used the opportunity to salute the courage, gallantry, and sacrifices of the Armed Forces of Nigeria under the leadership of the Chief of Defence Staff, General Olufemi Oluyede, noting that their continued efforts remain central to restoring stability across troubled parts of the country.
According to the Forum, the Armed Forces have demonstrated resilience and professionalism in the face of complex security challenges, often operating under difficult conditions to safeguard communities and defend Nigeria’s territorial integrity.
“We salute the Armed Forces of Nigeria for their unwavering commitment and sacrifices. Their gallantry in confronting criminal elements and reclaiming territories is a testament to their dedication to national service. We recognise that the path to peace is demanding, and we honour those who stand daily in defence of our nation,” the statement added.
The Forum pledged its full support to ongoing military operations and called for strengthened collaboration between security agencies and local communities as a critical factor in achieving lasting peace.
It also urged citizens across the Middle Belt to cooperate with security forces by providing timely information and fostering unity within their communities.
The MBPF, however, expressed concern over the need for greater synergy among security agencies, particularly the role of the Nigeria Police in consolidating gains made by the military.
“We call on the Nigeria Police Force to rise fully to its constitutional responsibility by effectively supporting the Armed Forces in stabilising and securing areas that have been cleared of criminal elements. Holding and policing such territories is essential to preventing a resurgence of violence,” Pastor Garba stated.
The Forum emphasised that sustainable peace requires a coordinated approach in which the military clears and secures areas, while the police maintain law and order to enable displaced communities to return and rebuild their lives.
The MBPF concluded by reiterating its commitment to peacebuilding efforts across the Middle Belt and expressed optimism that with sustained leadership, coordinated security efforts, and active citizen participation, lasting peace can be achieved.
“Together, through unity, vigilance, and collective resolve, we can overcome these challenges and build a safer and more peaceful Middle Belt,” the statement added.
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