Infrastructure overhaul and SME funding crucial for unlocking South Africa's trade potential

In a decisive 2026 State of the Nation Address delivered at Cape Town City Hall, President Cyril Ramaphosa underscored a strategic pivot towards revitalising South Africa's infrastructure and bolstering small and medium enterprises (SMEs).

These two intertwined themes emerged as cornerstones of the government's vision for economic revitalisation, signalling a commitment to not only improve physical infrastructure but also to enhance financial environments that support burgeoning businesses.

With a significant commitment of over R2.5 billion focused on SME funding alongside additional credit guarantees, the government aims to place trade and small business growth at the vanguard of South Africa's economic strategy.

As the country grapples with sluggish economic performance and job creation challenges, this renewed focus is not merely a political statement but an urgent call to action.

"Revitalising rail and ports are fundamentally a trade intervention," said James Booth, Head of Revenue at Verto.

"Efficient logistics reduce costs and improve competitiveness. But as trade volumes increase, so do the financial flows that underpin every shipment."

This perspective highlights a critical intersection between logistical efficacy and financial infrastructure, which must evolve concurrently to unleash the full potential of South African trade.

As South Africa strives to solidify its position in both African and global markets, the complexities of trade transactions cannot be overlooked. 

For every container that departs ports in Durban or Cape Town, associated processes—ranging from invoicing to currency conversion and cross-border settlements—quickly come into play.

These processes can place a strain on SMEs, particularly as they navigate currency risks, fragmented banking systems, and high transaction costs that threaten their already slim profit margins.

"Access to credit enables businesses to grow," Booth emphasised. "But if SMEs are going to scale beyond South Africa's borders, they also need fast, transparent and cost-effective cross-border payment infrastructure." This nuanced understanding points to the necessity for a holistic approach that not only invests in physical assets but also nurtures the financial channels necessary for SMEs to thrive.

Moreover, delays in payment settlements can severely constrain cash flow, and currency volatility poses a significant risk that can decimate potential profits between the invoice stage and the final payment.

Although intra-African trade shows promising growth, practical financial frictions still hinder the participation of emerging exporters, thereby stunting overall economic progress.

The government’s commitment to investing in rail and port infrastructure clearly signals an intention to restore South Africa’s competitiveness as a trading nation.

However, in order to fully unlock the potential for export-led growth, especially that which is inclusive and driven by women- and youth-led SMEs, there exists an urgent need for financial infrastructure to evolve in tandem with physical improvements.

Booth encapsulated this sentiment with a powerful metaphor: "If rail is the backbone and ports are the arteries of trade, payments are the bloodstream."

The measure of South Africa’s export ambitions will ultimately hinge not only on the efficiency of goods moving across borders, but also on the effectiveness with which value moves with them.

As the nation forges ahead in its economic recovery, it becomes paramount that these interdependent elements come together, unlocking new pathways for innovation and growth.

BUSINESS REPORT