For five years, nobody in South Africa could say with any authority how many businesses were going under. Not because the economy stopped producing failures, but because the data pipe that was supposed to count them broke, and nobody got around to fixing it until this year.
Statistics South Africa resumed publishing insolvency figures in July, the first release since a September 2021 cyberattack on the Department of Justice and Constitutional Development knocked out the system feeding it the raw numbers. The new release shows 753 businesses and partnerships were declared insolvent in the first half of 2026, a decline of 11.1% on the same period last year. June alone recorded 61 cases, down 56.1% on June 2025, and the second quarter’s 320 cases were 27.3% lower year on year than the equivalent quarter.
Read quickly, that looks like good news: fewer businesses are dying. Stats SA itself is less sure, and said so in the release, warning that the new series “should not be treated as a continuation of the previous one” because of the break between September 2021 and December 2022. Five years is long enough that comparing before and after is closer to comparing two different surveys than tracking one trend.
There is a second, more pointed reason to be careful with the improving numbers, and it has nothing to do with the data gap. The insolvency count only captures one specific legal event: a formal court sequestration or liquidation. It says nothing about the business that quietly closed its doors without ever filing, the owner who negotiated an informal wind-down with creditors, or the one who is still trading but has stopped paying suppliers on time. A falling insolvency count can mean the economy is healthier. It can also mean more businesses are finding ways to die, or merely struggle, off the official record.
The province breakdown makes the geography of the problem plain even if the trend is murky. Gauteng accounted for 476 of the 753 insolvencies, more than six times the Western Cape’s 124 and seven times KwaZulu-Natal’s 66. That concentration tracks the country’s economic weight, Gauteng being its largest provincial economy, but it is also a reminder that the headline national figure flattens a picture that looks very different depending on which province a business owner is reading from.
Dr Eric Levenstein, head of insolvency and business rescue at Werksmans Attorneys, offered a more direct read on what the numbers represent: businesses under severe financial distress increasingly turning to business rescue before liquidation, rather than distress disappearing. Business rescue, a formal process under the Companies Act that lets a financially troubled company reorganise under a court-appointed practitioner instead of being wound up, does not show up in an insolvency count at all. If more companies are choosing that route, a falling liquidation number says more about which door distressed businesses are walking through than about how much distress there is.
Credit insurer Allianz Trade, working off its own model rather than Stats SA’s new series, forecasts roughly 1,540 business insolvencies for all of 2026, with a further increase expected in 2027. That is a third again as many cases as 2025’s 1,606 and close to the 2024 figure of 2,105, suggesting whoever is counting expects the softer first-half numbers to be a lull rather than a turn.
For an SME owner, none of this changes the daily arithmetic of paying suppliers and staff on time. But it is worth knowing what the official insolvency count can and cannot tell you about your own sector’s health: a declining number on the news is not the same as declining risk, and a business that finds itself heading toward failure has formal alternatives to liquidation worth exploring with a practitioner well before the point where filing is the only option left. The data finally exists again. What it is actually measuring is still being worked out, by the people who publish it as much as by anyone reading it.
