SONA REACTIONS: Interview With Jurgen Eckmann, Wealth Manager at Consult by Momentum

SONA REACTIONS: Interview With Jurgen Eckmann, Wealth Manager at Consult by Momentum. Economic signals, policy direction and market confidence are shaping a new operating landscape for South African businesses, and understanding what those shifts mean in practical financial terms has never been more important. In this interview, Jurgen Eckmann, Wealth Manager at Consult by Momentum, unpacks what recent macroeconomic developments, policy commitments and market trends mean for entrepreneurs, startup founders and SME owners. From expansion decisions and investment positioning to compliance, risk management and long-term financial resilience, he offers a structured perspective on how business leaders can respond strategically to a stabilising yet still complex economic environment. Read about it below!

You noted that the macroeconomic environment appears more stable than in previous years. What does this mean specifically for entrepreneurs and SME owners?

Stability is not a luxury for small business — it is oxygen. When the macroeconomic environment becomes more predictable, entrepreneurs can actually plan beyond the next few months.

The 2026 SONA confirmed several verified stabilising signals that directly affect SME operating conditions:

Four consecutive quarters of GDP growth: South Africa’s economy is growing again, and President Ramaphosa confirmed this trend is gathering pace. For SME owners, growth in the broader economy typically means growing demand for goods and services.

Inflation at its lowest level in 20 years: Lower inflation means your input costs are under less pressure. It also means your customers retain more purchasing power — which is ultimately what drives SME revenue.

Declining interest rates: The President confirmed interest rates are coming down. For SMEs relying on revolving credit, overdraft facilities or working capital loans, this directly reduces the cost of doing business.

Credit rating improvement: South Africa’s credit outlook has improved. This reduces systemic risk across the economy — including access to capital markets that indirectly fund SME lending.

Removal from the FATF grey list: The country has been removed from the Financial Action Task Force grey list. This meaningfully improves South Africa’s reputation with international banks and trading partners — reducing friction for SMEs in cross-border transactions.

The financial planning principle here is straightforward: stability creates a window of opportunity. The question is not whether conditions are perfect — they are not — but whether you are positioned to act while the window is open.

Our advice to SME owners: use this period of relative macroeconomic stability to formalise your financial strategy. Build a 12 to 24-month cash flow model. Engage your financial adviser to stress-test your business plan against realistic economic scenarios. Stability is a planning gift — don’t waste it.

With easing inflation and declining interest rates, is this an opportune time for small businesses to expand or take on strategic debt?

This is perhaps the most important financial decision an SME owner faces in 2026 — and the answer is nuanced.

The SONA confirmed several enabling conditions for strategic debt: interest rates are declining, inflation is at its lowest in 20 years, and government has committed to amending the National Credit Act regulations to make it easier to access credit at a lower cost. Furthermore, more than R2.5 billion in funding will be directed to over 180,000 SMEs in 2026, with an additional R1 billion in guarantees extended.

These are genuine tailwinds. But the key word in your question is ‘strategic’. Debt for the sake of expansion is not strategy — it is risk.

Our guiding principle: strategic debt must be tied to a specific, measurable revenue opportunity. If you can show that R500,000 in debt generates R1.2 million in contractually committed or highly probable revenue within 24 months — that is strategic debt. Debt to ‘grow generally’ is dangerous in any environment.

What the SONA signals for debt-funded expansion: The R1 trillion public infrastructure commitment creates real downstream demand for construction services, material suppliers, logistics companies, technology providers and professional services firms. If your SME services one of these corridors, the demand case for expansion is strong.

What you must guard against: Interest rates are declining but they are not yet low. Debt repayment obligations are fixed even when revenue is variable. Build your repayment model on conservative revenue assumptions, not your best-case projections.

Before taking on debt, have an honest conversation with your financial adviser about your debt-to-revenue ratio, your cash conversion cycle, and whether you have 3 to 6 months of operating expenses in reserve. Expansion without a liquidity buffer is not ambition — it is exposure.

You suggested investors reassess offshore versus local allocations. How should startup founders think about geographic diversification in their own investment strategies?

Startup founders often make the mistake of treating their personal investment strategy as completely separate from their business. It is not. Your startup IS your largest investment — and it is 100% South Africa-denominated, rand-denominated, and exposed to South African risk. That changes how you should think about everything else.

The SONA confirmed a strengthening rand and an exceptionally well-performing JSE — described as ‘the largest stock exchange on the African continent.’ These are legitimate signals that domestic assets are becoming more attractive relative to where they were 12 to 24 months ago.

What this means for founders: If you have offshore savings or investments, this is not the moment to add more offshore exposure indiscriminately. You are already taking on concentrated South African risk through your business. Your personal investment portfolio should provide balance — but that balance may now require less offshore weighting than it did when the rand was weaker and domestic assets were under greater pressure.

Diversification is not about geography alone — it is about reducing correlated risk. A founder with 80% of their net worth in a South African startup and 20% in offshore equities is better diversified than a founder with 100% in their startup. But how you split that 20% matters.

Practical considerations: South Africa’s annual foreign investment allowance (currently R10 million per individual) gives founders a structured mechanism to diversify offshore over time. Use this strategically and annually — not reactively. The rand strengthening in the short term creates a better exchange rate for doing so.

The broader point: founders should treat personal financial planning with the same rigour they apply to their cap table. Work with a qualified financial adviser to map your total risk exposure — business equity, personal assets, retirement savings and offshore holdings — and ensure you are not inadvertently doubling down on correlated South African risk.

How does improved JSE performance influence private market confidence and venture activity?

The SONA explicitly noted that the Johannesburg Stock Exchange has ‘performed exceptionally well over the past year’, reflecting ‘broader economic recovery, investor confidence and increasing interest in South African equities.’ This is not a trivial statement — it has direct implications for startup and venture ecosystems.

Public market performance functions as a leading confidence indicator for private markets. When institutional investors see returns in listed equities, their appetite for risk across the broader investment spectrum increases. Venture capital and private equity funds are often managed by the same institutions whose portfolios include listed equities.

The transmission mechanism: Strong JSE performance improves the balance sheets of institutional investors — pension funds, asset managers, insurers. Better balance sheets improve their capacity and willingness to allocate to higher-risk, illiquid assets like venture capital. This creates a downstream benefit for startup founders seeking funding.

Borrowing costs declining: The President confirmed declining borrowing costs. For venture-backed businesses, this reduces the hurdle rate that investors apply when valuing future cash flows. Simply put — a lower discount rate means future earnings are worth more today. This is structurally supportive of higher startup valuations.

However, founders should be cautious about reading JSE performance as a guarantee of easier venture funding. South Africa’s formal VC ecosystem remains relatively small. The connection between public markets and early-stage startup funding is indirect and lagged. Strong JSE performance improves the conditions — it does not open the tap automatically.

Our advice: use the improved confidence environment to build relationships with investors now, while sentiment is positive. Investors commit when conditions feel stable — and conditions are more stable today than they have been in several years. Timing your fundraise to a period of positive macro sentiment is one of the few factors within a founder’s partial control.

With loadshedding easing, which sectors do you believe present the strongest opportunities for startup growth?

President Ramaphosa confirmed that South Africa has ‘brought an end to load shedding and built a more dynamic and resilient energy system.’ For startups, this is a structural change — not just a relief. Sectors that were previously avoided due to energy unpredictability are now viable again.

Based specifically on what the SONA committed to and confirmed, several sectors stand out:

Green economy and renewable energy: By 2030, more than 40% of South Africa’s energy supply will come from renewable sources. The SONA confirmed a 150% tax deduction for investment in new energy vehicles from March 2026, and international pledges to the Just Energy Transition Investment Plan now stand at approximately R250 billion. Startups in clean energy technology, battery storage, EV infrastructure and green manufacturing are entering a heavily funded growth corridor.

Digital infrastructure and technology: 55 data centres have already been built in South Africa, with more than R50 billion in investment expected over the next three years. The SONA confirmed a Digital ID launch, digitisation of driver’s licences, matric certificates, and the MyMzansi platform. Startups building on top of digital government infrastructure — in identity verification, document management, fintech and civic tech — have a significant and growing addressable market.

Agriculture and agri-tech: South Africa is already the second-largest exporter of citrus fruit in the world. The SONA committed to deploying 10,000 new extension officers and expanding into new export markets. Startups serving the agricultural value chain — from precision farming to cold chain logistics and export market access — are operating in a government-backed growth sector.

Tourism: The tourism sector recorded 10.5 million international visitor arrivals in 2025 — a historic high. The SONA committed to extending the Electronic Travel Authorisation system to all visa-required countries, enabling digital processing within 24 hours. Startups in travel technology, hospitality management and experience economy are benefiting from this structural demand growth.

Critical minerals and mining technology: South Africa’s ore reserves are valued at more than R40 trillion. New gold, copper, rare earths, platinum and coal mines are being opened. Startups serving the mining technology, exploration data and minerals processing value chains have a multi-decade growth tailwind.

The financial planning lens: sector opportunity alone is not enough. Startups should assess whether government commitment in these sectors translates to actual procurement spend, infrastructure deployment and regulatory certainty within a 24-36 month window — the typical horizon for startup capital deployment.

You highlighted municipal governance and infrastructure quality as emerging investment risks. How should founders factor location risk into expansion decisions?

The SONA was unusually direct on municipal dysfunction. President Ramaphosa quoted the Auditor-General: local government is characterised by ‘insufficient accountability, failing service delivery, poor financial management and governance, weak institutional capability and widespread instability.’

Government has already laid criminal charges against 56 municipalities for failing to meet their obligations — and indicated it will now lay charges against municipal managers personally for violating the National Water Act. This level of intervention signals that municipal failure is systemic, not isolated.

For founders considering expansion: Location is no longer just a logistical decision — it is a risk management decision. Municipalities differ dramatically in their ability to provide reliable water, electricity, waste management and road infrastructure. These are not minor operational considerations — they are existential for certain business models.

Think of municipal quality as a hidden operating cost. A warehouse in a municipality with unreliable water supply may require investment in water storage, backup systems and insurance coverage that effectively negates the benefit of lower rental costs.

What to assess before committing to a location: Review the Auditor-General’s most recent audit outcomes for the municipality — these are publicly available. Assess whether the municipality is on the Presidential Working Group support list (currently eThekwini and Johannesburg). Evaluate the municipality’s revenue collection rate and capital expenditure patterns on infrastructure maintenance.

The SONA’s mitigating signals: A new White Paper on Local Government is being finalised. A revised R54 billion incentive for metros to reform water, sanitation and electricity services has been introduced. A National Water Crisis Committee, chaired by the President, has been established. These are corrective measures — but correction takes time.

Our practical advice: if your expansion decision can be deferred by 12 to 18 months without material competitive disadvantage, waiting for early evidence of municipal reform may reduce location risk significantly. If timing is critical, price municipal risk explicitly into your financial model — include contingency budgets for infrastructure gaps and ensure your lease agreements allocate responsibility for service failures appropriately.

If broad tax relief is unlikely, what tax planning strategies should entrepreneurs prioritise in 2026?

The SONA confirmed two consecutive primary budget surpluses and a focus on debt stabilisation. In this fiscal context, broad personal or corporate tax relief is unlikely. The government needs revenue. But tax efficiency and tax relief are not the same thing — and smart entrepreneurs understand the difference.

What the SONA did confirm in terms of specific tax-related interventions:

150% tax deduction for new energy vehicle investment: From March 2026, businesses investing in new energy vehicles qualify for an enhanced 150% tax deduction. For SMEs with vehicle fleets or logistics operations, this is a material tax planning opportunity that should be assessed immediately.

Skills development levy reform: The proportion of the skills development levy returned to employers will be increased, restoring it to its original level of 40%. Employers who actively invest in staff training and workplace-based learning will benefit from improved levy recovery — making human capital investment more tax-efficient.

SME funding and credit access: The National Credit Act amendments will make credit more accessible at lower cost. While not a direct tax measure, lower cost of credit improves after-tax returns on financed investments.

The broader principle: when the tax environment is not generous, the priority shifts to ensuring you are claiming every legitimate deduction available to you — and structuring your business to make those deductions as large as possible.

Strategies entrepreneurs should prioritise: Maximise business expense deductions including home office, business travel, and technology costs where legitimately applicable. Structure retirement contributions through your business — employer contributions to retirement funds are deductible and reduce both individual and company tax burden. Review your business structure: sole proprietors, close corporations and companies are taxed differently, and the optimal structure changes as revenue grows. Engage a tax practitioner to review your depreciation and capital allowance elections — especially if you are investing in equipment or infrastructure in 2026.

One critical note: the SONA confirmed that the South African Revenue Service is described as ‘once again a world-class tax authority’ and enforcement is increasing. This is not the environment for aggressive or ambiguous tax positions. Compliance is not optional — it is a business continuity decision.

How might increased compliance scrutiny impact small businesses operationally?

The SONA’s compliance messaging was unambiguous. It confirmed the SARS repositioning as a world-class tax authority, strengthened anti-corruption bodies including the Special Investigating Unit, the NPA and the Hawks, mandatory lifestyle audits for senior public servants, a national illicit economy disruption programme targeting tobacco, fuel, alcohol and counterfeit products — and 10,000 additional labour inspectors being hired specifically to enforce immigration and labour law.

This is a significant escalation of the compliance environment. For legitimate small businesses, this is actually a competitive advantage — if you are already compliant.

The businesses that face operational disruption from increased compliance scrutiny are those that have been operating in the grey areas — informal labour arrangements, cash-based revenue under-reporting, use of undocumented foreign workers, or operating without the required licences and permits. The SONA signals that these grey areas are shrinking rapidly.

The operational impact for compliant SMEs: Increased compliance burden on competitors who have been operating informally may level the playing field. Sectors like retail, hospitality, construction and security — where informal competition has undercut compliant businesses on price — may see a structural shift in competitive dynamics.

What compliant SMEs should do: Conduct a compliance audit of your own business now — before an inspector does it for you. Ensure your employment contracts, UIF registrations, PAYE submissions, and VAT compliance are current. If you have any uncertainty, engage a labour law practitioner or accountant now. The cost of proactive compliance is always lower than the cost of reactive remediation.

The Business Licensing Bill: The SONA referenced that public comments on the draft Business Licensing Bill have been taken seriously, with the final Bill intended to make it ‘easier, not harder’ to start and run a small business. This is a positive signal — but entrepreneurs should monitor the final legislation closely before it is enacted.

Our view: treat compliance as a fixed cost of doing business and build it into your operating budget. The era of informal advantage is being systematically dismantled. The businesses that invest in compliance infrastructure now will be the ones that scale without regulatory disruption.

Could improved crime enforcement meaningfully lower business risk and insurance costs for startups?

The SONA made organised crime its primary security focus for 2026. Specific commitments included: 5,500 additional police officers being recruited this year, adding to the 20,000 announced in previous addresses; SANDF deployment to support police in dealing with gang violence in the Western Cape and Gauteng; a new criminal justice reform initiative modelled on Operation Vulindlela; a national illicit economy disruption programme; and the Whistle-Blower Protection Bill to be introduced in Parliament.

The President was direct: ‘Organised crime is now the most immediate threat to our democracy, our society and our economic development.’ The acknowledgement is important — it signals prioritisation of resources.

The insurance question: Business insurance premiums in South Africa reflect actuarial risk — which is directly correlated to crime statistics, claim frequency and claim severity. For premiums to fall meaningfully, the crime environment must change materially and consistently over multiple years. One SONA’s commitments will not move premiums in 2026. But a sustained three to five-year trajectory of improved enforcement could.

Think of crime enforcement improvement as a lagging indicator for insurance costs. The policy commitments are made today. The enforcement outcomes follow. The insurance actuaries update their models. The premium negotiations happen 12 to 36 months after that. Be patient, but position yourself to benefit from the trend.

What startups can do now: Review your current business insurance coverage comprehensively — many startups are underinsured, particularly for business interruption, cybercrime and theft. Don’t wait for premiums to fall before getting correctly covered. Use a qualified broker who understands the SME risk profile in your specific sector and geography.

The indirect benefit: Reduced crime risk lowers the non-insurance cost of doing business — security personnel costs, physical security infrastructure, time lost to crime-related disruptions and staff trauma. These costs are rarely tracked precisely by SMEs but they are material. A safer business environment improves operational efficiency in ways that do not show up in an insurance invoice.

Our view: the crime enforcement commitments in the 2026 SONA are the most operationally specific and resource-backed of any we have seen in recent years. The deployment of SANDF and the Madlanga Commission reforms in particular signal institutional intent, not just rhetoric. We are cautiously optimistic — but proof will be in the 12-month crime statistics that follow.

What are the top financial planning moves founders should make now to remain resilient despite ongoing cost-of-living pressures?

The SONA was honest: ‘For too many people, life remains hard. Jobs are scarce and opportunity is out of reach.’ Cost-of-living pressures are real and they affect founders not just as business operators but as individuals supporting families, managing households and planning for their own financial futures.

Here are the financial planning priorities we believe every founder should act on in 2026:

1. Separate personal and business finances completely: Many founders blur the boundary between personal and business cash flow. In a high cost-of-living environment, this creates compounding risk. Draw a clear salary from your business. Budget your personal expenses independently. This clarity will also make tax compliance and business valuation significantly easier.

2. Build and protect your emergency fund: Three to six months of personal living expenses, held in a liquid, low-risk vehicle, is not optional — it is the foundation of financial resilience. For founders, the income volatility risk is higher than for salaried employees. Your emergency fund is your personal circuit breaker.

3. Protect your retirement contributions: The Two-Pot retirement system now allows limited access to savings — but accessing retirement funds has material long-term consequences. Every rand withdrawn early compounds its cost over decades. Cost-of-living pressures are real, but retirement savings should be the last lever you pull, not the first.

4. Review your risk cover: Life insurance, disability cover and income protection are not luxuries — they are the financial infrastructure that protects your family and your business if you cannot work. Many founders are underinsured. Use this period of relative economic stability to review and correct your cover.

5. Invest in tax-efficient vehicles: With no broad tax relief on the horizon, maximise your contributions to tax-advantaged retirement vehicles such as retirement annuities. Every rand contributed to a retirement annuity reduces your taxable income — this is one of the most reliable tax planning tools available to founders regardless of business structure.

6. Engage a financial adviser: Not a once-off conversation — a structured annual review of your complete financial position: business equity, personal assets, retirement savings, offshore exposure, tax position and insurance coverage. The founders who navigate the next 24 months successfully will be those who treat personal financial planning with the same discipline they apply to their businesses.

The SONA’s narrative of cautious optimism is well-founded — the macroeconomic signals are genuinely improved. But optimism is not a financial plan. Structure is. The founders who build financial structure now, while conditions are stabilising, will be best positioned to capture the opportunities that this environment is creating.

South Africa is at a turning point. Your personal finances should be too.