TymeBank SME Forecast June 2025

SA plots its course in a shifting geopolitical landscape

• As South Africa navigates a protectionist US administration and pressure from BRICS partners, at least we finally have a national budget

Johannesburg, 04 June 2025: Going into June, SMEs are glad of at least some diminishing pressure on the cost of credit after the Reserve Bank’s Monetary Policy Committee’s 25-basis-point cut at the end of May. Inflation is largely stable, and the exchange rate is trending favourably, giving the MPC some room for monetary easing. The economy needs every bit of help it can get, and this cut will no doubt be reflected in business confidence.

This month, Miguel da Silva, Group Executive: Business Banking at TymeBank, looks at upcoming events that will influence South Africa’s position in a rapidly reshaping global order, and the effect of this reconfiguration on SMEs.

Budget treads tricky course without cutting expenditure

The national budget outlined a programme of continued expenditure propped up by less contentious funding mechanisms than previously tabled. VAT will remain at 15%, providing certainty for SME pricing and cash flow planning after the proposed increase was dropped. In order to make up the shortfall, the general fuel levy will increase by 16 cents per litre for petrol, and by 15 cents per litre for diesel starting 4 June, and the Minister suggested that tax compliance would be a continued area of focus.

The fuel levy increases will compound existing cost pressures for SMEs, particularly those in logistics, manufacturing, and retail sectors that rely heavily on transportation. With many small businesses already operating on razor-thin margins, this 16-cent increase represents an additional burden that will likely be passed on to consumers, potentially dampening demand in an already constrained market.

The Minister mentioned a goal of “removing the regulatory burden on businesses”, but did not elaborate. Other details conspicuous by their absence included any specific SME-support programmes, funding initiatives, or targeted relief measures that owners might have hoped for in a challenging economic environment.

First quarter GDP figures

The Minister also revised his predictions for our economic growth to 1.4% in 2025, down from 1.9%. With the official unemployment rate now at 32.9% and the official first quarter GDP growth figure a disappointing 0.1%, the disconnect between our economic ambitions and the harsh reality that only 16.8 million South Africans are in active employment highlights the urgent need for policy innovation.

What seems clear is that under these constrained market conditions there is no way for established businesses to incorporate the millions of South Africans looking for work. There is far greater potential for entrepreneurs to create new jobs, and a focus on small business support and development has to be prioritised.

SME funding will remain an important area of discussion – and entrepreneurs, funders and public-sector representatives will meet to discuss the state of small business funding in South Africa at the SME SA Funding Summit 2025 on 12 June – but even more important is the creation of an environment which is conducive to entrepreneurship: less red tape and dependable infrastructure.

AGOA forum in DRC

The relationship between SA and the US remains fraught, but at least there is dialogue. Apart from the Presidential meeting in the Oval Office, trade, industry and competition minister Parks Tau and agriculture minister John Steenhuisen have submitted a new trade framework to US trade representative Jamieson Greer. There are key areas where US investment might help us unlock value at home, and which might appeal to the deal-centric nature of the US administration. Developing a domestic source of natural gas would bolster SA’s regional competitiveness and energy security, and we remain a key source of scarce minerals.

The annual conference on AGOA between trade ministers of AGOA-eligible countries and the US is meant to take place in the DRC (Democratic Republic of Congo) in June. This will be an important indicator of what the US will do when AGOA expires in September 2025, though it seems unlikely at this stage that SA's AGOA benefits will be extended. While the overall impact of the loss of AGOA would not be immense for SA, some sectors – particularly the automotive and agricultural sectors – would be hurt. Both sectors have wide value chains, and SME suppliers are rapidly recalibrating.

The potential loss of AGOA benefits creates particular uncertainty for SME suppliers in the automotive value chain, many of whom have built their business models around preferential access to US markets. These companies now face the complex challenge of either finding alternative markets or restructuring their operations to remain competitive under standard trade terms.

BRICS summit in Brazil

The BRICS Summit, scheduled to take place in Brazil in early July, will again place SA in US crosshairs, as provocative issues (such as an alternative to the dollar as world reserve currency) will be raised and debated by BRICS countries. The timing couldn't be more delicate. For SMEs, particularly those in export-oriented sectors, this diplomatic tightrope walk translates into very real business planning challenges.

Where do allegiances lie in a rapidly shifting global order? This geopolitical balancing act requires SMEs to develop strategies that can withstand diplomatic volatility while capitalising on emerging opportunities within both western and BRICS markets.

About TymeBank

TymeBank is currently one of the world’s fastest-growing digital banks and the first digital bank to reach profitability in Africa, with more than 11 million customers since launching in February 2019. The bank is founded on simplicity, transparency and affordability and is designed to make digital banking accessible and affordable to all South Africans across the economic spectrum. TymeBank has no monthly banking fees, it takes less than five minutes to open an account and in most cases transaction costs are 30 to 50% lower than what customers would pay at other local banks. Through a distribution partnership with Pick n Pay, Boxer, and TFG stores, TymeBank has over 1,000 kiosks and 15,000 retail points across the country. Through its merchant cash advance offering, TymeBank is the largest SME funder of its kind in the sector.

For more information visit www.tymebank.co.za

Issued by Aprio on behalf of TymeBank

For queries please contact: 

Cecilia Pinto Taylor - 0833259169 or cecilia@aprio.co.za Pontsho Ramontsha - 0724717357 or pontsho.ramontsha@tymedigital.com