SMEs will receive useful guidance from the economic indicators set to be released during August.
Small and medium enterprises (SMEs) should brace for impact as some economic and geopolitical factors will lead to unfavourable outcomes, while some will offer relief.
As things stand, a 30% US tariff will be implemented on 7 August 2025 on exports, which is not very good news for businesses.
But on the brighter side, the South African Reserve Bank (SARB) Monetary Policy Committee (MPC) has decided to cut interest rates, which can offer some relief to small businesses.
Tariffs
Miguel da Silva, Group Executive: Business Banking at TymeBank, said that with the upcoming implementation of the US tariffs, the South African government is making plans on how to mitigate the fallout.
“The South African Government has ‘pulled out all the stops’ during a flurry of trade delegations and counteroffers but is now making arrangements to deal with the expected fallout, including the establishment of an export-support desk that will provide updates and advisory services to exporters, and a rumoured package of Treasury-backed incentives for some affected sectors.”
He, however, notes that the tariffs that matter are subject to change. In April, the Trump administration announced a 31% tariff on South Africa, which was then suddenly dropped to 10%.
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Sarb cuts interest rate
The Reserve Bank Governor Lesetja Kganyago announced a 25-basis-point lowering of the interest rate on 31 July, and that the Sarb would be revising its inflation target to 3% from its previous 3–6% range.
“The revised target makes it unlikely that we will see any more interest-rate cuts this year, meaning borrowing will remain more expensive than many households and businesses might have hoped.
“Kganyago emphasised that the SARB expected the new target to enhance credibility with global investors, making borrowing for the state less expensive, and protect the rand (which has fallen to a several-month low nonetheless).”
The release of the Consumer Price Index (CPI) inflation data from Statistics South Africa will give SMEs some guidance on input-cost planning in this tightening market.
Uncertainty on business conditions
He highlighted that SMEs will receive useful guidance from the economic indicators set to be released during August.
The S&P Global South Africa PMI serves as a single-figure snapshot of operating conditions in the private-sector economy.
While the recent Purchasing Managers Index (PMI) performance showed improvement to 50.8 in July 2025, marking the first growth since November 2024, and indicating the fastest business activity expansion in four years.
“The Bureau for Economic Research conducts its quarterly business confidence survey in mid-August, with questionnaires distributed to manufacturing, retail, wholesale, and construction sectors.
“Results, typically published in early September, will influence Q4 2025 business planning. Current confidence levels fell to 40 points in Q2 2025 from 45 points in Q1, remaining below the long-term average of 43 points, suggesting cautious SME sentiment, and who’s to blame them.”
ALSO READ: SMEs need to brace for reduced orders due to a 30% US tariff
Global SME Ministerial Meeting
Deputy President Paul Mashatile emphasised the importance of the African Continental Free Trade Area Agreement to the continent’s entrepreneurial landscape during the Global SME Ministerial Meeting on 24 July 2025 in Boksburg.
The meeting had representatives and Ministers from more than 100 countries to address the issues hindering SMEs from reaching their full potential under the theme “Navigating New Business Frontiers”.
However, da Silva noted that Mashatile did not mention any concrete measures the government is taking to support SMEs, apart from the R100 Billion Transformation Fund touted by Trade, Industry and Competition Minister Parks Tau.
GNU passes a national budget
“In some good news, the government of national unity (GNU) continues to make its way unsteadily forward, with the National Council of Provinces effectively passing the 2025 National Budget.
“All GNU partners approved the Appropriation Bill that allowed the budget process to be concluded. When tough conditions prompt pragmatic alignment amongst our political leaders, at least there’s some room for optimism,” he added.
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