The exchange for the debt economy
Source: site
South Africa is currently rated as one of the most difficult countries in the world for collecting commercial debt, with a “Severe” level of collection complexity and very long payment delays.
What the headline refers to
The headline points to the latest Allianz Trade “Collection Complexity Score and Rating” report, which evaluates how easy or hard it is to recover unpaid business invoices in 52 economies covering about 90% of global GDP and trade. In this report, South Africa scores 67 out of 100, placing it in the “Severe” risk band and ranking it among the most challenging markets globally for debt collection.
Why South Africa is so tough
Key reasons highlighted in the report and local coverage are:
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Long payment delays: Although standard terms are 30–60 days, many South African companies only pay after about 90 days, and SMEs often take 120–180 days to settle invoices.
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Structural and legal frictions: Court-related hurdles and insolvency proceedings are major contributors to collection complexity in South Africa and the broader Africa region, making formal recovery slow and costly.
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Economic pressures: A slow‑moving economy, tighter financing conditions, and liquidity constraints mean many firms simply lack cash to pay on time.
An example: a small exporter granting 60‑day terms to a South African buyer may realistically wait 120 days or more for payment and face cumbersome legal procedures if the buyer defaults.
How South Africa compares globally
Allianz Trade’s global Collection Complexity Score is 47.2 out of 100, which they classify as “High,” so debt collection is not easy anywhere, but South Africa is significantly worse than the global average.
| Item | South Africa | Global / other countries |
|---|---|---|
| Collection Complexity Score | 67 (“Severe”) | 47.2 global average (“High”) |
| Rank in difficulty | Around 43rd out of ~49–52 countries | Sweden, Germany, Finland among easiest (scores ≈30). |
| Typical contractual payment terms | 30–60 days | 30–60 days common in many markets. |
| Actual payment time often seen | 90–180 days (especially SMEs) | Generally closer to agreed terms in top European markets. |
| Regional context | Middle East & Africa among most complex regions | Western Europe mostly “Notable” (less severe). |
Implications for businesses and exporters
For companies trading with South African counterparties, this environment has several implications:
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They need stronger credit management, including tighter credit checks, clearer payment terms, and potentially shorter credit limits or staged payments.
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Many firms rely on tools like trade credit insurance or specialized collection partners to mitigate losses and navigate local legal procedures.
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South African exporters themselves also face high difficulty collecting abroad; within their top 20 export destinations, countries such as Saudi Arabia, the UAE, and China are particularly challenging to collect from.
If you tell me whether you’re looking at this as a lender, supplier, investor, or policymaker, I can outline tailored risk‑management steps for your specific situation.
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