April brought a fragile but defining moment for SA’s economy. The initial promise of recovery was tested by a weakening rand, the re-emergence of load-shedding, after a record stretch of stability, and growing uncertainty in fiscal and foreign policy.
Political unease in the government of national unity (GNU) fed investor anxiety, while the global environment grew more complex. Amid this turbulence, the mid-corporate segment is increasingly emerging as a key, yet undersupported, engine of resilience.
Though seldom profiled in mainstream economic analysis, this market segment is critical. It comprises about 3,000-3,500 businesses, often privately owned, primarily unlisted and typically with a turnover of more than R1bn. These firms contribute up to a quarter of the banking sector’s headline earnings. Yet they operate without the benefit of bespoke policy, regulatory attention or tailored strategic support.
Turnover alone doesn’t define them. Their distinction lies in structure and ambition. Most are family managed or backed by ultrahigh-net-worth individuals and institutional shareholders. They maintain established balance sheets and are deeply integrated into local and regional value chains. They stimulate employment and often anchor industries in secondary cities and undercapitalised corridors.
These businesses show resilience but are not immune to the country’s macro pressures. The re-emergence of load-shedding in late 2024 after a record stretch of stability signalled how structural issues continue to cap growth just as momentum began to seem possible. The dynamics that drive or hamper economic expansion directly shape their ambitions.
Despite the dampened outlook, opportunity remains. Several mid-corporates are using this period to grow through acquisition. With weaker balance sheets now more visible in certain sectors, well-capitalised players are identifying suitable targets. The consolidation trend is accelerating and mid-corporates are leading the charge.
But growth is constrained by energy insecurity, logistics challenges, infrastructure bottlenecks and policy ambiguity. The GNU’s inability to provide clarity on tax, trade, infrastructure and labour has heightened risk perception. Foreign investors read our domestic contradictions as volatility. Though recent foreign policy developments are beyond our control, they have created ripples across global markets. For mid-corporates, these policy gaps and exchange rate fluctuations make capital access and market expansion increasingly complex.
These dynamics are acute in capital-intensive sectors. Even well-performing businesses are delaying hiring, shelving expansion or limiting cross-border exposure. When policy risk eclipses operational strength, it reveals a system not working hard enough for its productive base.
There is another layer of complexity: environmental, social and governance (ESG) transformation. Climate volatility and a more demanding regulatory environment have placed ESG high on executive agendas. Carbon accountability is fast becoming a prerequisite for trade. It is no longer enough to invest in clean energy or meet sustainable development goal (SDG) 7 benchmarks. Companies must demonstrate a broader impact on climate and society.
In SA the added disruption of electricity and water reinforces the urgency of sustainability-linked infrastructure. Goals such as SDG 6 (clean water), SDG 7 (energy), and SDG 12 (responsible consumption) are now operational imperatives. While implementation is complex, firms that embed ESG into their strategic planning will find themselves more competitive.
Procurement leaders are adjusting scorecards, institutional investors are tightening mandates and global customers want assurance that doing business with an SA firm won’t introduce ESG risk. Mid-corporates that delay decisive action risk exclusion.
Overlaying all of this is the pace of technology disruption. The fourth industrial revolution has created a labyrinth of digitised economies, identities and trust. Artificial intelligence (AI) is now front of mind for most executives, often in the context of risk. But these risks come with rewards. Businesses that invest in data optimisation, AI, blockchain and Web3 are boosting efficiencies and unlocking new markets.
These challenges show that mid-corporates are not just navigating complexity, they are being reshaped by it. The interdependence of energy, policy, ESG and technology risk means traditional banking relationships are no longer enough. These firms need insight, foresight, partnership and an ecosystem that recognises their distinct position and empowers them.
• De Kock is with Nedbank Commercial Banking.
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