Durban's economic fortunes have been mixed with the number of businesses declining but there has been an uptick in employment. Picture: Doctor Ngcobo Independent Newspapers
Image: Doctor Ngcobo Independent Newspapers
The Durban Chamber of Commerce and Industry (DCCI) is undertaking a study to investigate the factors contributing to the notable decline in small and medium-sized businesses within the city.
Data from the South African Revenue Service (SARS) indicates that hundreds of businesses with five to ten employees have either closed down or relocated outside the city. This trend is particularly noteworthy, especially given recent employment data showing an increase in job opportunities in Durban.
"The concern was around small businesses in particular between five and 10 employees and then slightly bigger businesses between 20 and 60 employees. So it's in that category of small and medium-sized businesses," DCCI chairperson Ajiv Maharaj said to broadcaster Newzroom Afrika.
"We're still conducting research to better understand the situation," he added.
Maharaj emphasised that small businesses typically face a high failure rate, particularly for enterprises with around five employees.
"Often with small businesses, there is a high failure rate. It's generally a trend in the country where you have a number of small businesses failing," he said.
He also mentioned that a possible reason for the decline could be fewer companies submitting their tax returns.
"Other reasons could also be a result of fewer companies submitting their tax return. So it's not a foregone conclusion that this number of businesses have closed or moved out of the city or closed, it's certainly a possibility," Maharaj added.
Durban businessman and co-chairperson of the KZN Growth Coalition, Moses Tembe, stated that some businesses may have closed due to a challenging business environment, adding that Covid-19 may have also been a factor.
"The impact of looting and Covid-19, although these events occurred a few years ago, is really being felt now. I can tell you about my own children; they used to run about 12 businesses employing 400 people. Now, they are down to one business that employs just 60 people," he told IOL's sister publication The Mercury.
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