South African small and medium enterprises (SMEs) face a critical period as the expiration of the African Growth and Opportunity Act (Agoa) in September 2025 and a new inflation target reshape trade and financing conditions, according to TymeBank’s September SME Outlook.
Agoa deadline puts exports at risk
The looming expiry of Agoa threatens established export channels that account for 35% of South African trade with the United States. The risk comes on top of 30% US tariffs introduced earlier this year, creating mounting uncertainty for export-oriented SMEs.
Manufacturers in the automotive components, agricultural products and textiles sectors are urged to accelerate contingency planning as duty-free access could fall away for thousands of product lines.
SARB’s new inflation target narrows policy space
The South African Reserve Bank’s Monetary Policy Committee meets on 18 September under the revised 3% inflation target. Annual consumer price inflation accelerated to 3.5% in July, breaching the new objective and leaving limited room for rate relief.
For SMEs, this recalibration has direct consequences for financing and operational planning, with borrowing costs and working capital pressures expected to remain elevated. The decision coincides with monetary policy moves from the US Federal Reserve and European Central Bank, adding further uncertainty to currency dynamics and trade competitiveness.
Pension funds step into SME financing
A partnership between National Treasury and the pension fund industry has mobilised almost R1bn for SME lending. The model leverages R90m from the Jobs Fund to unlock R900m from pension funds, with Treasury’s capital positioned as first-loss cover in an independent trust structure.
This structure addresses pension funds’ traditional reluctance to engage with high-risk SME lending, offering a 10% buffer to meet fiduciary requirements. The funds will be channelled into high labour-absorption sectors, including green industries, sustainable agriculture, waste and water management, and the informal economy.
Cost relief and infrastructure reforms
September is set to bring fuel price decreases supported by softer global oil prices and relative rand strength. For transport-reliant SMEs, this provides short-term operational relief heading into the fourth quarter.
Government has also awarded conditional rail slots to 11 private operators in a step towards reforming South Africa’s struggling freight-rail network. While implementation is still some way off, the move signals potential improvements in logistics capacity that could ease supply chain constraints for SMEs.
Global SME Finance Forum offers access to capital
Johannesburg will host the Global SME Finance Forum from 15–17 September, a side event of the G20 Presidency. More than 1,200 participants from 60 countries are expected, including 240 financial institutions.
The event provides a platform for South African SMEs to connect directly with international lenders and explore financing solutions such as blended finance and guarantee programmes.
