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Why Businesses Fail in South Africa. By Ekos Akpokabayen

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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

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Taskforce Chairman: Akerele Adetayo. An impressive achievement marked by exceptional thoroughness

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Taskforce Chairman: Akerele Adetayo. An impressive achievement marked by exceptional thoroughness

…A considerable monumental stride without blemishes

~By Oluwaseun Fabiyi 

 

The one-on-one meeting with the Taskforce Chairman was a remarkable and unforgettable experience.

 

*How familiar are you with CSP Adetayo Akerele’s leadership as Chairman of the Lagos Task Force?*

 

_*Oluwaseun Fabiyi, publisher of Bethnews Media magazine and online, had a recent encounter with Akerele Adetayo that will shed more light on his achievements and good standing; we invite you to listen attentively*_

 

As Chairman of the Lagos State Environmental and Special Offences Enforcement Unit (Taskforce), Akerele Adetayo, an extraordinary CSP and trustworthy police officer, remains a beacon of excellence, mirroring greatness through his benevolent heart and unwavering commitment to superior service standards in Lagos and its environs

 

Without a doubt, Akerele Adetayo, the former 2iC Taskforce and pioneer LAMATA Commander turned Chairman of the Lagos State Taskforce, has solidified his standing as a highly effective and accomplished commander in the Nigerian Police Force, recognized for his impressive stride and visionary leadership.

 

CSP Adetayo Akerele’s career advancement has been grounded in his meticulous approach to duty and commitment to delivering results, which has distinguished him among his peers. As Chairman of the Lagos Environmental and Special Offences Enforcement Unit Taskforce, he has established a functional compliance desk that promotes seamless interaction with the public and enables effective response strategies

 

CSP Akerele Adetayo’s professional trajectory in journalism has garnered substantial admiration and a distinguished reputation among media practitioners across print and electronic media, complemented by his specialized knowledge in security and digital strategy, which has critically shaped the orientation of the Lagos State Taskforce

 

As Chairman of the Lagos State Task Force since 2024, he has consistently upheld the core mandate of delivering exceptional security services to citizens, ensuring peace, order, and internal security across the state, built on a foundation of professionalism, strong public relationships, effective teamwork, and unwavering accountability. Under the leadership of CSP Adetayo Akerele, the Lagos State Environmental and Special Offences Enforcement Unit Taskforce has achieved notable success in leveraging advanced technology while maintaining exemplary standards of individual appearance, conduct, and professionalism.

 

Akerele Adetayo’s exceptional dedication to service excellence has earned him numerous accolades for his outstanding contributions to the Lagos Taskforce unit and the Nigerian police force at large, in recognition of his professionalism and exemplary service

 

 

As the Chairman of the Lagos Taskforce unit, his active participation in every activity underscores a broader commitment to the agency’s structural growth. His consistent and prompt approach emphasizes execution and maximum security protection for the safety of the masses, as he fosters a teamwork network of assets that drive the agency’s growth and accessibility.

 

Note Bethnews Media shall provide its exceptional wisdom exhibited in the forthcoming article.

 

Oluwaseun Fabiyi, a seasoned journalist based in Lagos, reports.

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Postings Are Not Optional: Why The Police Must Reassert Discipline Over Transfer Resistance

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Postings Are Not Optional: Why The Police Must Reassert Discipline Over Transfer Resistance

 

 

 

In recent days, a wave of commentary across sections of the media has sought to cast routine police postings in a controversial light, particularly within Zone 2 Command of the Nigeria Police Force, which oversees Lagos and Ogun States. At the heart of the narrative is a claim misleading at best that the redeployment of officers from the zone is either improper or should be resisted.

 

This framing deserves closer scrutiny, not just for what it says, but for what it risks encouraging.

 

Postings and transfers are not punitive tools; they are essential administrative instruments in policing worldwide. They ensure operational balance, prevent the entrenchment of interests, and promote a fair distribution of manpower across commands. In a country as vast and complex as Nigeria, where some divisions grapple with acute personnel shortages, the ability of police leadership to deploy officers where they are most needed is not just lawful it is indispensable.

 

Attempts to portray transfers as “illegal” or unjustifiable undermine this fundamental principle. No command, regardless of its perceived strategic importance, can be treated as an exception to the rules that govern the wider institution. To do so would create a dangerous precedent one where postings are dictated not by operational necessity, but by preference, influence, or resistance.

 

The idea of 845 plus Senior Police Officers alone in Zone 2 Police Command is a thing of worry and it’s certain that the junior officers number would be nothing more than thrice of that of the SPOs. The newly posted and promoted AIG in charge of the Zone should be swift and decisive. The Nation is waiting.

 

More concerning, however, is the growing tendency to escalate internal administrative matters into the public domain. While transparency is vital in public institutions, there is a clear distinction between accountability and the externalization of internal processes in ways that may erode discipline. Policing, by its very nature, relies on a structured chain of command. When that structure is weakened whether through public pressure, media campaigns, or external influence the consequences extend beyond internal order to overall effectiveness.

 

There are also broader operational questions that cannot be ignored. Reports of disproportionate personnel concentration in certain formations, set against a backdrop of manpower shortages in many parts of the country, point to the need for deliberate and strategic redeployment. Ensuring that officers are equitably distributed is not merely an administrative exercise; it is central to improving response times, strengthening community policing, and enhancing national security outcomes.

 

It is equally important to acknowledge the role of the media in shaping public perception. Journalism remains a critical pillar of democracy, but with that role comes responsibility. Narratives that inadvertently legitimise resistance to lawful directives risk doing more harm than good, particularly in a disciplined service where cohesion and obedience to command are non-negotiable.

 

None of this diminishes the importance of officer welfare or the need for fair and transparent posting policies. Indeed, a well-managed transfer system must take into account both operational demands and human considerations. However, these concerns are best addressed within established institutional frameworks—not through pressure campaigns or attempts to influence outcomes from outside the system.

 

At its core, this moment presents a test of institutional resolve. The leadership of the police must balance empathy with firmness, ensuring that decisions are guided by the collective good rather than individual interests. Upholding the integrity of postings is not simply about moving personnel; it is about reinforcing the principles that sustain discipline, professionalism, and public trust.

 

A police force that cannot enforce its own internal directives risks sending the wrong message—not just to its officers, but to the citizens it serves. Conversely, a force that stands by its processes, applies its rules fairly, and communicates its decisions clearly strengthens its legitimacy.

 

In the end, the issue is not about one command or one set of officers. It is about preserving the institutional backbone of policing itself.

 

Akindele Adegebo writes from Lagos.

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4 BRIGADE EMERGES OVERALL CHAMPION OF 2 DIVISION INTER-BRIGADE CORPORALS AND BELOW COMPETITION 2026 IN BENIN

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4 BRIGADE EMERGES OVERALL CHAMPION OF 2 DIVISION INTER-BRIGADE CORPORALS AND BELOW COMPETITION 2026 IN BENIN

 

4 Brigade, Nigerian Army, on Thursday, 23 April 2026, emerged overall champion of the 2 Division Inter-Brigade Corporals and Below Competition 2026, which was held from 20 to 23 April 2026. The competition was hosted by 4 Brigade at the Nigerian Army Cantonment, Ekehuan, in Benin City.

 

In his welcome address, the Commander 4 Brigade, Nigerian Army, Brigadier General Ahmed Balogun, disclosed that the competition is designed to improve combat proficiency, leadership skills, organizational ability, teamwork, endurance, and to promote esprit de corps among soldiers of junior ranks. He added that it also challenges their initiative and prepares them for higher responsibilities.

 

He noted that the competition is not just about winning or losing, but about fostering a spirit of unity, resilience, and continuous improvement. “It provides a platform for sharing knowledge, learning from one another, and building stronger bonds within our ranks. The lessons learned and the experiences shared here will undoubtedly enhance our operational effectiveness and strengthen our team spirit,” he said. He further appreciated the General Officer Commanding (GOC) 2 Division, Major General Chinedu Nnebeife, for the confidence reposed in the Brigade to host this year’s Corporals and Below Competition, as well as for his commitment to improving training and the welfare of personnel.

 

In his closing remarks, the Special Guest of Honour, the Commandant, Nigerian Army School of Supply and Transport, Major General Adebayo Adegbite, expressed satisfaction that the objectives of the competition had been largely achieved. He stated that he had no doubt that the various events contested by the formations had significantly improved their physical and mental capacity, enhanced leadership traits, and strengthened organizational ability, while also preparing them for operational engagements in view of the current security challenges confronting the nation.

 

He further charged participants to take back to their respective formations the experience and knowledge gained during the competition and translate them into remarkable achievements in the field for the benefit of their formations and the Nigerian Army at large.

He also expressed profound gratitude to the Chief of Army Staff (COAS), Lieutenant General Waidi Shaibu NAM, for his unwavering commitment to the development of junior non-commissioned officers, whom he described as the backbone of the Army. He added that 2 Division remains grateful for the COAS’s strategic guidance and support. He also commended the planning team for ensuring that the competition was fair, challenging, and reflective of real-world operational standards.

 

The 2026 edition of the 2 Division Inter-Brigade Corporals and Below Competition featured events such as drill competition, combat swimming, map reading, weapon handling and firing, combat cross-country race, and obstacle crossing. Participating formations included 4 Brigade, 12 Brigade, 22 Armoured Brigade, 32 Artillery Brigade, 42 Engineers Brigade, and 2 Division Garrison. At the end of the competition, 4 Brigade, emerged overall champion, while 12 Brigade, and 2 Division Garrison, came second and third respectively.

 

The ceremony was graced by heads of security agencies in Edo State, as well as friends of the Brigade. Highlights of the closing ceremony included obstacle crossing competition among formations, presentation of awards, souvenirs, and group photographs.

*KENNEDY ANYANWU*

Captain

Assistant Director Army Public Relations

4 Brigade Nigerian Army

Benin City

 

24 April 2026

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