By Bernard Vilakazi

For the 2026 fiscal year, the South African government has placed transport at the centre of its recovery strategy. In his recent Budget Speech, Finance Minister Enoch Godongwana announced a raft of public-sector infrastructure spending set to exceed R1 trillion, much of it directed at transport and logistics, which he described as the “foundation upon which long-term economic growth, improved service delivery and job creation are built”.

Recent data indicates that over the past year, Transnet sustained improved operational performance, driven by increased rail volumes and progress in fleet renewal. In addition, according to the 2026 Budget Review, over the next three years Transnet plans to invest R76.6 billion to improve the efficiency and reliability of the logistics value chain, with the intention of enabling greater private-sector participation across key freight corridors, including iron ore, manganese, coal, chrome and containerised cargo. At the same time, the South African National Roads Agency will continue investing in both toll and non-toll roads, maintaining approximately 27,000 kilometers of the national road network and resurfacing around 2,000 kilometers annually to strengthen long-term network resilience and mobility. This level of investment is both welcome and necessary, and it signals that transport and logistics are rightly being recognised as central to economic development. But infrastructure alone will not resolve the pressures facing businesses on the ground, where the operating environment has become more demanding and less forgiving.

That matters because, despite its shortcomings, road is the dominant mode of transport in South Africa. According to recent findings from Stats SA, in the third quarter of 2025 road accounted for 85.5% of total freight volumes, compared with 14.5% moved by rail. Even for passenger transport, road carries 74.0% of the total, compared with rail’s 26.0% share. Rail investment is important and long overdue, but even under optimistic reform timelines, road transport will continue to carry the bulk of South Africa’s freight and passenger movement for years to come, which means the country’s growth ambitions will rest heavily on the resilience of road transport and warehousing businesses.

But that resilience cannot be taken for granted.

According to the Ctrack Transport and Freight Index, the road freight sector had another difficult year in 2025, following a 7.7% decline in payload in 2024 and a further 0.4% contraction in the first ten months of 2025. The storage and handling sub-sector also declined by 2.3% in 2025, marking a fourth consecutive year of contraction. Inventory levels have trended lower, partly due to subdued domestic demand as well as structural shifts driven by improved efficiencies and technology in warehousing and inventory management.

There is a perception that the sector is being weighed down by congestion, logistics bottlenecks, and infrastructure constraints, and that is not wrong. But in many cases, when transport and logistics businesses fail, it is not only macro conditions that determine the outcome. More often, the pressure shows up in working capital and cash flow management, and many of these challenges could be mitigated through earlier and more deliberate conversations about how the working capital cycle is structured.

Take a simple example: securing finance for a new truck. It is often seen as the starting point for launching or expanding a transport business. But if payment terms run to 60 days and there is no provision to cover fuel, variable costs, and fixed expenses over that period, the business begins operating under strain from day one. Without a clear understanding of that working capital cycle, even a well-run operation can become vulnerable, and failure is too easily attributed to congestion or broader inefficiencies rather than to the way the cash flow was structured. This is where financiers can misjudge the sector, viewing it as inherently high risk rather than recognising the opportunity that exists when risk is properly understood and structured. With the right industry insight and disciplined financial structuring, transport and logistics can be financed in a way that strengthens long-term sustainability.

Getting this right requires a more informed and nuanced assessment of risk, one that recognises how factors such as route economics, border delays, fuel volatility, and contract structures influence cash flow in real time. With better use of data, telematics, and digital platforms, it is possible to assess performance with greater precision and structure tailored financial solutions that align more closely with how businesses actually operate.

Most importantly, attention needs to turn to how road transport and logistics fit into the more integrated national transport system that is coming. It has never really been about road versus rail; it is about how road and rail work together, alongside ports and air. Road will most likely always handle the first and last mile, and warehousing and storage will still play an important role. The task is to support the businesses carrying the bulk of the workload today while also preparing them to transition into that more connected future, particularly if South Africa is serious about improving competitiveness and driving sustainable growth.

Bernard Vilakazi, Sector Specialist for Transport and Logistics at Absa Business Banking

By Adesoji Solanke

Back in 2014, two blockchain pioneers set out to solve a problem confronting the early cryptocurrency ecosystem: the extreme price volatility of Bitcoin and the first generation of altcoins made them difficult to use for everyday transactions and impractical as a reliable medium of exchange. Their answer came from an experimental blockchain platform called BitShares, where a token known as BitUSD was designed to track the value of the US dollar.

Users could create the token by locking up the network’s native cryptocurrency, BitShares (BTS), as collateral inside a smart contract, with the idea that the system would maintain a dollar-equivalent value through overcollateralisation and market incentives. For a time, the model appeared to work. BitUSD became the world’s first stablecoin and circulated within a small but growing ecosystem of early cryptocurrency exchanges as a way for traders to move between assets without returning to the banking system.

But because BitUSD was backed by BitShares, sharp swings in the price of the underlying token undermined the mechanism intended to maintain the peg, and by 2018 the system entered forced settlement after becoming under-collateralised. The peg broke and the token gradually faded from relevance, joining a growing list of early attempts at digital dollars that proved more fragile than their designers expected. The idea, however, survived the failure. If anything, BitUSD demonstrated that the demand for a digital representation of the dollar inside financial networks was real, even if the first attempts to engineer it were not robust enough to sustain it.

Today, the stablecoin market is booming – especially in Africa.

According to a new report by BVNK, stablecoin supply has increased by more than 500% over the past five years, pushing the total market value above US$300 billion. The report also found that ownership is more widespread in low and middle-income economies (60%) than in high-income ones (45%), with Africa leading at 79%. Over the past 12 months, the continent has also recorded the fastest growth in stablecoin holdings, driven largely by activity in Nigeria and South Africa.

Data from Yellow Card points to the same trend across the continent. Stablecoins accounted for 43% of total cryptocurrency transaction volume in sub-Saharan Africa in 2024. Nigeria emerged as the largest market, recording nearly $22 billion in transactions between July 2023 and June 2024. South Africa, meanwhile, has seen stablecoins displace bitcoin as its most widely used digital asset, with volumes growing by around 50% month-on-month since October 2023.

Much of the uptake stems from long-standing frictions in how money moves across African markets.

In economies where access to hard currency is constrained, stablecoins are being used as an additional channel for holding and transferring dollar-denominated value. They are also reducing the cost and time associated with remittances and cross-border payments, allowing funds to move between individuals and businesses without passing through multiple settlement layers. For payment companies operating across several jurisdictions, they are being used as a treasury tool to move liquidity between markets without tying up working capital in prefunded accounts.

They are also appearing in the labour market, where African professionals working for international firms are receiving compensation directly in digital dollars, preserving the value of their earnings in volatile currency environments.

These use cases are also beginning to intersect with existing payment infrastructure across the continent. In East Africa especially, stablecoins are appearing alongside mobile money platforms, as infrastructure providers build on- and off-ramps between digital dollars and local currencies that allow them to move within the same payment workflows used for everyday transactions.

The uptake is also being supported by a regulatory environment that is gradually taking shape across the continent. Mauritius was among the early movers in establishing frameworks for digital asset businesses, while Kenya and Ghana have introduced regulatory regimes for Virtual Asset Service Providers. Uganda and South Africa are moving toward greater supervisory clarity, with regulators in many other markets also engaging directly with industry participants through roundtables and live demonstrations of how these systems operate in practice.

This is not to say there are not legitimate concerns around regulatory reporting, consumer protection, and the potential impact of widespread USD-denominated stablecoins on domestic monetary policy. However, the trajectory suggests that policymakers recognise stablecoins as an enduring feature of the financial landscape. The task now is to craft proportionate frameworks that manage these risks while allowing the technology to develop within the continent’s financial system.

In the near term, several developments are likely to determine the next phase of stablecoin adoption across the continent. Integration with wallets, mobile network operators and the emergence of local currency stablecoins, could deepen domestic use by building on existing payment habits. At the same time, consumer-facing innovation that removes technical complexity will matter; most users will not need to understand blockchains in order to benefit from them. Deeper integration with banks may prove to be the real inflection point, particularly as custody, liquidity provision and treasury services begin scaling stablecoin applications into areas such as trade finance and supply-chain payments. Whether the ecosystem matures into a cohesive network will also depend on interoperability between fintechs, banks and infrastructure providers rather than the development of fragmented systems.

Adesoji Solanke, Head of Fintech & Banks Investment Banking Origination, Absa CIB

By Abdul Yassim and Mosa Tshabalala

Before 2008, global banks operated through expansive cross-border networks, tiering markets into core and peripheral exposures and managing trade flows accordingly, but in the wake of the global financial crisis, regulators reassessed the risks embedded in those balance sheets, capital requirements tightened, and international banks began concentrating their activities closer to home. In many so-called frontier markets, they turned to regional partners to support their transactional and investment banking activities, relying on local balance sheets and compliance infrastructure to intermediate trade. In Africa, that meant deeper engagement with domestic and regional banks that could facilitate cross-border transactions on the continent.

Trade hubs became gateways into the continent, allowing local banks to intermediate trade for global partners with greater confidence, and for those partners the priorities were straightforward: certainty of payment, speed of settlement, and competitive pricing.

Those priorities still matter today, and whether they’re delivered in practice depends on how quickly capital moves through the transaction.

Take an everyday transaction: an order comes in, and raw materials, labour, production, and transport all have to be funded before a single payment is received. By the time goods cross a border, weeks may already have passed, and settlement can take longer still where processes are uneven, or payment terms extend across jurisdictions. If trade credit, supplier finance, or receivables discounting are not readily available, even modest delays begin to strain the balance sheet.

That has implications beyond the business itself, including for those financing and investing in it.

Supply chain finance therefore becomes pivotal to intra-African trade, particularly for foreign investors allocating capital into the region. By advancing funds against approved invoices and verified trade flows, it shortens the distance between shipment and payment and gives investors clearer visibility into how transactions perform over time. As that cycle becomes more consistent, capital can be committed at scale without demanding wide buffers for uncertainty.

However, despite an estimated supply chain finance market on the continent exceeding $60 billion, UNCTAD suggests that only between 7% and 25% of demand is currently met, and Afreximbank reports that just 18% of African banks’ SCF portfolios are directed toward intra-African trade. That imbalance means a significant share of cross-border trade operates without consistent, structured working capital support, and it is here that foreign investors eyeing opportunities on the continent can find their entry point. Backing Africa’s trade expansion does not require creating new demand; it requires financing trade that is already moving but under-served. And for that capital to scale comfortably, the financial infrastructure around intra-African trade has to become more coherent.

Regional trade becomes expensive to finance when too much of the transaction sits in separate systems that do not talk to each other. A buyer may know a supplier well, and a supplier may trust a buyer, but once a bank or insurer steps in, it often has to piece together the transaction from scattered documents and inconsistent settlement records, and the cost of that reconstruction shows up in pricing.

This is why it is important to develop stronger regional digital supply chain platforms. These are shared tools that bring buyers, suppliers, logistics providers, and financiers onto the same transactional record, linking confirmed orders, shipment updates and payment data in a way that can be accessed across borders. They reduce the need for each institution to independently reconstruct a deal from fragments, and instead allow financing decisions to rest on a verified record of what has actually been traded and settled.

But the effectiveness of regional platforms ultimately depends on the quality of the data flowing into them. UNCTAD research finds that businesses that use digital technologies such as enterprise resource planning (ERP) systems, electronic invoicing and integrated data platforms are better positioned to access SCF because they generate more consistent and transparent transaction records. African banks have also developed in-house digital SCF portals that allow their corporate clients to onboard suppliers and manage invoice finance programmes online. By automating processes that were previously manual and paper-heavy, these platforms have reduced administrative costs and made it commercially viable to include smaller suppliers who would once have been too expensive to serve.

The way risk is measured also needs to change. Much of trade-linked lending on the continent still leans heavily on fixed security, property and guarantees, assets that smaller firms either do not have or cannot pledge without choking their own operations. Transaction data provides a different basis for judgement: repeated orders, buyer payment behaviour, settlement timing, dispute frequency, the ordinary signals of whether a business performs. When lenders can rely on that record, funding can be structured around what the firm does rather than what it owns, and that is how SCF moves from being an instrument used by a few large anchor programmes to something that changes who can participate in regional trade.

When lenders can rely on that record, funding can be structured around what the business does rather than what it owns, and that is what allows capital to move more confidently into intra-African trade at scale.

Abdul Yassim, Head: Trade and Working Capital South Africa and Mosa Tshabalala, Head: Institutional Trade and DSI Sales, Absa CIB

By Abdul Yassim and Mosa Tshabalala

If one were to speak to African suppliers who trade across borders, many would say that doing business within the continent can feel riskier than exporting beyond it. Especially for small and medium-sized enterprises (SMEs), information on counterparties is not always easy to obtain, regional currencies can be volatile and difficult to hedge, forward markets offer little depth, and access to affordable finance is often limited at precisely the moment it is needed most. Financial institutions also sometimes price regional trade more cautiously than comparable transactions further afield, even though the markets sit closer together, and despite the clear opportunity to finance these supply chains, only a portion of the demand for capital is met.

In practical terms, this puts pressure on the supply chain. Take an everyday transaction: an order comes in, and raw materials, labour, production, and transport all have to be funded before a single payment is received. By the time goods cross a border, weeks may already have passed, and settlement can take longer still where processes are uneven or payment terms extend across jurisdictions. If trade credit, supplier finance, or receivables discounting are not readily available, even modest delays begin to strain the balance sheet.

This is why easier access to supply chain finance (SCF) is so important to expanding Africa’s regional trade agenda.

However, despite an estimated SCF market on the continent exceeding $60 billion (merely 2% of global volume), UNCTAD suggests that only between 7 and 25% of demand is currently met, and Afreximbank reports that just 18% of African banks’ SCF portfolios are directed toward intra-African trade.

When working capital is scarce and currency risk sits with the supplier, cross-border trade becomes a balance-sheet decision rather than a market opportunity. Smaller businesses begin to limit their exposure, prioritising domestic transactions where settlement is more predictable and informal credit can bridge short-term gaps, and pricing defensively where exchange-rate volatility threatens already thin margins. Over time, the result is a narrowing of participation, with only the most capitalised firms able to operate comfortably across borders.

There are practical solutions that can be implemented in the near term to make SCF more bankable. Regional trade becomes expensive to finance when too much of the transaction sits in separate systems that do not talk to each other. A buyer may know a supplier well, and a supplier may trust a buyer, but once a bank or insurer steps in, it often has to piece together the transaction from scattered documents and inconsistent settlement records, and the cost of that reconstruction shows up in pricing.

This is why it is important to develop stronger regional digital supply chain platforms. These are shared tools that bring buyers, suppliers, logistics providers, and financiers onto the same transactional record, linking confirmed orders, shipment updates and payment data in a way that can be accessed across borders. They reduce the need for each institution to independently reconstruct a deal from fragments and instead allow financing decisions to rest on a verified record of what has actually been traded and settled.

But the effectiveness of regional platforms ultimately depends on the quality of the data flowing into them. UNCTAD research finds that businesses that use digital technologies such as enterprise resource planning (ERP) systems, electronic invoicing and integrated data platforms are better positioned to access SCF because they generate more consistent and transparent transaction records.

African banks have also developed in-house digital SCF portals that allow their corporate clients to onboard suppliers and manage invoice finance programmes online. By automating processes that were previously manual and paper-heavy, these platforms have reduced administrative costs and made it commercially viable to include smaller suppliers who would once have been too expensive to serve.

The way risk is measured also needs to change. Much of trade-linked lending on the continent still leans heavily on fixed security, property and guarantees, assets that smaller firms either do not have or cannot pledge without choking their own operations. Transaction data provides a different basis for judgement: repeated orders, buyer payment behaviour, settlement timing, dispute frequency, the ordinary signals of whether a business performs. When lenders can rely on that record, funding can be structured around what the firm does rather than what it owns, and that is how SCF moves from being an instrument used by a few large anchor programmes to something that changes who can participate in regional trade.

When suppliers can access working capital against confirmed trade flows, entire value chains become more bankable, payment cycles become more predictable, and cross-border relationships become more durable because financing is tied directly to commercial activity rather than to fixed assets.

If the African Continental Free Trade Area is to translate into real commercial activity, this financial architecture has to grow with it. Trade agreements can open corridors, but it is the movement of working capital within value chains that determines whether those corridors carry consistent trade or sit largely idle.

Abdul Yassim, Head: Trade and Working Capital South Africa and Mosa Tshabalala, Head: Institutional Trade and DSI Sales, Absa CIB

By James Noble

Ahead of the Franchise Association of South Africa’s 2026 National Conference and Expo, James Noble, Sector Executive: Wholesale, Retail and Franchising at Absa Business Banking, underlines the importance of growing this sector to the economy of South Africa and the wider continent.

If franchise business owners want to scale up and stay ahead of the pack in their retail areas, they must embrace new technology and innovation, or risk being overtaken as the modes of doing business change globally and AI emerges as a critical tool to succeed.

While the franchise business sector already contributes R1 trillion to the South African economy, there’s optimism for even further growth. Those who succeed will be adaptable, open to data-driven decisions and willing to tailor their business towards a better user experience in an ever-changing trading environment. Being able to contribute towards reconfiguring established best practice when needed – often at a dizzying speed – will be a key driver of maintaining competitiveness, helping brands illustrate their resourcefulness and demonstrating they will not be left behind. A good example of this was during the Covid-19 pandemic when South Africa saw which retailers were quick off the mark to mobilise their same day grocery and retail home deliveries. It was abundantly clear which retailers dithered and were left behind. The early adapters improved their models and are still ahead of the pack. Those who came late to the party may have difficulty catching up.

It’s inevitable that AI capability will play a far more significant role in driving successful business going forward. Smart business owners know that loyalty programmes steer customer behaviour. To this end, AI is already starting to identify specific customer needs and spending patterns, and tailoring discount vouchers and loyalty points based on what these customers normally purchase. Using predictive demand capabilities, AI will streamline business by analysing past data to predict future orders, for example. Another way AI will contribute will be in solving the often-lengthy times taken for fast food deliveries, a big crunch point for many businesses.

Again, the innovators will be the ones that corner the market in their fields. For instance, we are already seeing the rise of dark kitchens here, where many fast-food outlets are clustered together in an unbranded location under an umbrella shell, so that home deliveries can reach customers faster and smarter. It’s a brilliant solution concept which works well. No one wants a cold takeout, delivered late because the outlet is all the way across town.

Self-service and high-tech cashier-less checkouts also have the potential to fly, but this will be limited to those who can afford this expensive technology.

While the notion exists that AI will deprive people of jobs, this could be balanced by more franchises being established. The FASA 2023 Franchise Survey, sponsored by Absa, indicates that within the sector, each new franchise business brings the potential of eight to 10 new jobs. Crucially, for every 14 direct jobs, seven indirect jobs are created in supply chains and support services. Many of these represent material prospects for economic empowerment for women, youth, black owned business and emerging markets in townships and rural communities.

Having supported South Africa’s franchise industry for more than three decades, Absa has developed a deep understanding of the evolving needs of both franchisors and franchisees. Its sector expertise connects with franchise businesses throughout their lifecycle – from new entrants to established brands looking to scale. Insights suggest as the mobile economy and models of financial inclusion expand in Africa, there’s greater scope for those who have been previously sidelined to participate in the market. For instance, there are more women as primary owners of the business as franchising creates new opportunities for them. In addition, women are coming forward to head up the franchisee councils within brands, so they’re at the forefront of representing the interests and concerns of franchisees.

The FASA data reflects growing confidence for penetration into underserved markets. Predictably, Gauteng still has the largest amount of franchise outlets at 41%, with 16% in the Western Cape, 12% in KwaZulu-Natal, and the other provinces with a combined 31%.

The data FASA has mined reveals that as of 2023 there were 68,463 franchisees operating across 727 franchise systems. There was a healthy 43% increase in franchisees operating franchise systems since 2019. Approximately half a million direct jobs were created, representing 4.7% of national employment.

It’s encouraging that according to FASA, 89% of franchisees achieve break even within the first year, up from 69% in 2019. That’s firm testimony to the positive business prospects franchising offers right now.

Franchise ownership by the previously disadvantaged increased from 20% in 2019 to 48% in 2023. South Africa can boast that some 88% of franchise systems are locally owned brands. Almost 40% of South African franchise brands have demonstrated their global competitiveness by operating outside South Africa. Their growth into Africa to markets like Botswana, Lesotho, eSwatini, Namibia, Mauritius has helped create employment opportunities outside our borders, with 13% expanding their reaches into the Middle East, United States, and United Kingdom.

The franchise sector has demonstrated a dogged resilience, weathering some tough economic challenges while maintaining its 15% contribution to GDP over the last couple of years.  Encouragingly, that 15% is growing, reflecting the power of collaboration between franchisors and franchisees, the strength of proven business models, and the effectiveness of knowledge transfer.

The longevity and sustainability of businesses in the franchise sector are also far greater than that of independent businesses. A solid illustration of that is that 80% of franchise businesses are successful beyond three years, whereas 80% of independent SMEs have failed in this period.

As at the start of 2026, the environment for South African SMEs has improved, driven by the lowest fuel costs in several years, more than 270 days without load shedding, the Rand trading at much stronger levels to the dollar, and interest rates dropping to their lowest since 2024. If these trends continue, and franchise owners harness the best new technology they can afford, the broad success of franchises in this decade – and their contribution to the national economy – should be assured.

James Noble, Sector Executive: Wholesale, Retail and Franchising at Absa Business Banking