The identification and subsequent mitigation or transfer of external risks is key to ensuring long-term business sustainability. This makes an understanding of evolving macroeconomic conditions important for all stakeholders in the insurance industry and the businesses they protect.
However, businesses often insure their physical assets while overlooking the substantial value tied up in outstanding invoices, leaving them exposed to losses when customers fail to pay.
Christo Bekker, chief commercial officer at Coface South Africa, told a recent InsureTalk67 online event that businesses need to pay greater attention to receivables and payment risks.
“If we are not actively discussing receivable concentration and payment risk, we may leave the client’s biggest risk uninsured,” he said.
Rising business failures
Rising business failures increase the risk of unpaid debts, with consequences across supply chains. South Africa recorded 2,089 liquidations between January and September 2026, according to the latest Statistics South Africa figures. Although this represents some improvement over the prior period, Coface expects further liquidations in the coming year.
South Africa’s liquidation statistics are nothing to celebrate, but they do present opportunities for brokers and underwriters to engage businesses on the management of their trade credit exposures.
Bekker encouraged brokers to engage clients on the financial risks of extending credit, particularly when expanding into new markets or dealing with larger customers. He said that trade credit insurance could protect businesses against qualifying losses, but that it was not a substitute for sound risk management.
Offering trade credit solutions can also help brokers differentiate themselves from competitors. They potentially gain access to a wider set of decision-makers within the business, and a better understanding of its operations and strategy.
Bekker argued that brokers who help clients trade with greater confidence become harder to replace because they remain involved in the business beyond the annual insurance renewal discussion.
External macroeconomic shocks can have consequences well beyond the businesses directly affected. “Businesses do not fail only because they lack sales; they can fail because they do not get paid,” Bekker concluded.
He said trade credit solutions promoted sustainability by protecting receivables, and encouraged brokers and insurers to help clients to understand the interconnected risks arising from an insolvency at a major trading partner.
Global economic pressures
The need to look beyond conventional insurance exposures is reinforced by the growing number of external shocks affecting African businesses.
Since February 2026, many African economies have seen inflationary pressures arising from the Middle East conflict and consequent disruption to global energy markets and supply chains. And more recently, South Africa and Rwanda learned that the United States will remove them from the African Growth and Opportunity Act (AGOA), effective 1 January 2027.
The programme grants qualifying exports from eligible African countries duty-free access to the US market. Losing this preferential treatment will make certain exports less competitive, although it will not prevent affected businesses from continuing to trade with the US. As an aside, some hopeful commentators contend that the US midterm election results could yet prompt a review of the decision.
Economists suggest that the direct impact on both national economies will be small. Johann Els, chief economist at PSG Financial Services, said that only around 0.7% of South Africa’s total goods exports entered the US under AGOA in 2025. And Rwanda’s exposure is smaller still, with the US accounting for approximately 2% of its merchandise exports, only a fraction of which benefited from AGOA preferences.
These modest national figures conceal devastating consequences for individual businesses in niche sectors of each economy. The lesson is that trade policy decisions that barely move the needle for a country’s GDP can put individual businesses at risk of insolvency, with knock-on effects for their customers and suppliers.
Aroni Chaudhuri, economist for Africa at trade credit insurer Coface, explored some of these external risks and their implications for African businesses during a recent presentation to the InsureTalk67 online event. He labelled the global macro view as one of “darkening skies, but still no rain yet” and warned that businesses and consumers faced a chaotic, uncertain and volatile world.
His core observation was that global economic growth, which economists use as an indicator for the health of the global economy, had held its ground through 2026.
The two ‘factors of resilience’ supporting this growth were identified as the adaptation of businesses, individuals and governments to the ‘new normal’ that emerged after the pandemic, and significant investment in artificial intelligence (AI).
“AI is, for now, a support to global growth, but it also presents a certain amount of risk,” Chaudhuri said.
Climate volatility
Climate volatility and geopolitical tensions stand out as structural risks that have a deep impact on African businesses and the re/insurers they rely on for protection. Chaudhuri singled out the El Niño weather phenomenon as a particular concern for sub-Saharan Africa, especially Southern Africa, where warmer and drier conditions threaten agricultural production.
He warned that increased risks of drought and wildfires during the summer growing season could reduce crop yields, drive up food prices and constrain economic growth. These developments also have implications for re/insurers with high exposure to affected property or sectors.
Large multinational brokers and insurers have been warning of the implications for years. In its 2026 assessment of Africa’s risk landscape, Marsh identified drought, flooding and water scarcity as threats to infrastructure, food security and insurability across the continent.
Meanwhile, research published by Allianz in July 2026 warned that parts of West Africa could also face agricultural disruption from what it called ‘Super’ El Niño risks. The research cited IMF estimates that a typical El Niño raises global food prices by around 5% within a year. There is also an established and clear correlation between this type of weather phenomenon and falling agricultural production in South Africa.
Geopolitical tensions
Turning to geopolitics, Chaudhuri suggested that the Middle East conflict would prove more difficult to resolve than initially thought. Control of the Strait of Hormuz, agreement on Iran’s nuclear programme and guarantees of an end to Israeli hostilities with Hezbollah in Lebanon were among the major sticking points. He expected the conflict to continue, with the possibility of further escalation into 2027.
Geopolitical conflicts, from Russia-Ukraine to the Middle East, have highlighted the dependence of global supply chains on maritime chokepoints, including the Strait of Hormuz and Bab el-Mandeb Strait. The resulting shipping delays and higher transport costs pose challenges for businesses dependent on global supply chains.
South African businesses dependent on imports and exports are also experiencing delays due to increased shipping traffic around the Cape of Good Hope and resultant pressure at the Cape Town, Durban and Port Elizabeth port terminals.
The economist argued that higher energy prices affected a range of other commodity prices, including food. Food traders are already pricing in a triple whammy of higher fuel prices; worse-than-forecast harvests in some important crop-producing countries; and disruptions linked to El Niño.
Although oil retraced some of its recent gains immediately following the US midterms, Coface expects oil prices to average around US$85-90 per barrel this year, and probably US$75-80 in 2027.
Higher commodity prices are often seen as a net positive for African exporters, but above-trend inflation could outweigh those gains.
“If you are exporting minerals, high prices may offset part of the increases in food and oil; but if food and energy prices remain high, then the overall impact of high commodity prices on African economies will be negative,” Chaudhuri said. He added that inflation was already above target in most advanced and emerging economies.
Diversified African economies such as Ghana and Kenya held up well through 2026, while oil exporters such as Angola and Nigeria were able to leverage higher oil revenues to diversify their economies. Chaudhuri explained that most African currencies had weathered the storm through 2026 thanks to having some form of commodity-based export support. But he warned that the risks were stronger next year.
Mixed bag
South Africa has had a mixed 2026. The domestic economy benefited from higher commodity revenues, a relatively stable rand and reasonable levels of foreign direct investment; but GDP growth was constrained by high fuel prices, with interest rate hikes threatening growth further out.
“The South African economy is generally staying in the same state; the shock has not overly affected it,” Chaudhuri said. But he warned that the impact of inflation on consumers would limit the country’s longer-term recovery.
South Africa’s low levels of investment remain a major obstacle to sustained economic recovery, with repeated external shocks delaying the prospect of maintaining GDP growth above 2% for several years. And businesses are clearly feeling the pinch.
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