Three Scenarios. One Question: Is Your Business Ready for Any of Them?
Last week the SARB handed South Africa’s Business Owners and Leaders a masterclass in uncertainty. The right response is not to panic – it is to prepare.
The South African Reserve Bank (SARB) does not do drama. When the Monetary Policy Committee sits down and publicly maps out three separate scenarios for where interest rates could go – each one worse than the baseline – they are not hedging for political optics. They are telling you, clearly, that the road ahead is genuinely uncertain. The question is whether you are listening.
Last month, the SARB hiked the repo rate by 25 basis points to 7.0%, pushing the prime lending rate to 10.5%. On its own, that is painful enough for businesses carrying debt or servicing overdrafts. But the real story is not the hike – it is the three scenarios Governor Lesetja Kganyago laid out after it.
The Three Scenarios You Cannot Afford to Ignore
The SARB’s Quarterly Projection Model flagged three distinct risk paths beyond the baseline:
Scenario 1 – A Prolonged Middle East Crisis:
The Iran-Israel conflict has already triggered a partial shutdown of the Strait of Hormuz, through which roughly 20% of the world’s oil passes. A longer closure means sustained oil price increases, higher transport and fertiliser costs, elevated food inflation, and a weaker Rand.
In this scenario, headline inflation could hit 5%, with two additional rate hikes on top of what has already been announced.
Scenario 2 – El Nino Returns:
Drought is not a new risk for South Africa, but it is a compounding one. If El Nino weather patterns take hold, agricultural output drops, food prices climb further, and rates stay elevated for longer.
The knock-on effects for supply chains, input costs, and consumer confidence are significant.
Scenario 3 – The Worst Case:
This combines both of the above with additional non-linear shocks – the kinds of events that are hard to model but entirely possible.
In this scenario, inflation peaks above 6%, requiring three extra rate hikes beyond the baseline forecast.
Governor Kganyago’s words were measured but direct: “We face a painful combination of higher global uncertainty and reduced disposable income. This will hit both investment and household consumption, which have been our main growth drivers.”
There is also a local layer of risk. Recent floods in the Western Cape, Eastern Cape, and North-West province have added to the economic pressure, and the SARB has already lowered its growth forecast for the next two years.
Why This Matters to You Specifically
These are not abstract macroeconomic concerns. They land directly on your income statement and your balance sheet.
Higher interest rates increase the cost of your debt. They reduce your customers’ disposable income, which affects demand. They raise your input costs through fuel and food price inflation. They put pressure on your workforce through the cost of living. And they slow down the investment decisions you need to make to grow.
Meanwhile, the planning environment has become genuinely treacherous. Do you invest now, while rates are ‘only’ at 10.5%? Do you hold back and wait for the cuts that the SARB’s model suggests are coming – eventually? Do you price for inflation or risk losing customers? Do you lock in supply contracts or stay flexible?
These are not questions with obvious answers. They are questions that require perspective, experience, and honest challenge. And that is precisely where most Business Owners and Leaders are most exposed – not for lack of intelligence, but because they are navigating this alone.
The Problem with Going It Alone
The higher the uncertainty, the more dangerous it is to rely solely on your own judgment. Not because you are not capable – but because every one of us has blind spots, biases, and emotional anchors that colour the way we read a situation.
When you are deep inside your business, the fog of daily operations makes it almost impossible to step back and think clearly about scenarios that have not happened yet. You might be too optimistic about your ability to absorb cost increases. You might be too conservative and hold back investment at exactly the moment when competitors are retreating and opportunity is opening up. You might simply not have the financial modelling, supply chain insight, or risk management experience to stress-test your assumptions.
Research conducted on behalf of The Alternative Board (TAB) by an independent team from George Washington University and Case Western Reserve University confirmed what TAB members have known for years: Peer Advisory Boards are most valuable precisely during periods of disruption and crisis. Rapidly changing economic conditions – exactly like what South Africa is experiencing right now – introduce challenges that no single business owner has all the answers to.
What a Peer Advisory Board Actually Does
A TAB Peer Advisory Board (PAB) is a small, facilitated group of non-competing Business Owners and Leaders who meet monthly to work on their businesses – not just in them. Each member brings their own sector knowledge, their own experience of managing through cycles, and their own honest view of your situation.
This is not a networking breakfast. It is not a motivational seminar. It is a structured, confidential space where your peers help you pressure-test your thinking, challenge your assumptions, and make better decisions – backed by diverse real-world experience.
In practical terms, here is how a PAB adds value when the SARB is handing you three different futures to plan for:
Stress-testing your scenario plans:
A fellow Business Owner who survived the 2008 financial crisis, the COVID-19 lockdowns, or the 2015 Rand collapse will see risks in your plan that you cannot see yourself.
Avoiding groupthink:
Your management team is loyal to you and to each other. Your peers are loyal to the truth. That is a different conversation.
Accessing cross-sector intelligence:
When fuel prices spike, a logistics business owner in your board already knows what is coming for your supply chain six weeks before your suppliers tell you.
Accountability for action:
It is one thing to decide to restructure your debt or reduce your working capital exposure. It is another to report back to seven peers on whether you actually did it.
The psychological anchor of not being alone:
Governor Kganyago acknowledged the emotional dimension of this environment. Business Owners and Leaders face enormous pressure, and isolation compounds it. A PAB breaks that isolation with a peer group that genuinely understands the weight of ownership.
Positioning for All Three Scenarios
The SARB has essentially told us that any of three materially different futures could unfold over the next 12 to 24 months. A business that has planned only for the baseline is exposed. A business that has thought through the implications of each scenario – for pricing, for capital allocation, for staffing, for supplier relationships – is in a fundamentally different position.
TAB’s proprietary Blueprint (BP) platform helps each member work through exactly this kind of structured thinking, capturing their personal and business goals alongside the strategic priorities that will get them there. But the platform alone is not the point. The point is the combination of structured self-reflection and honest peer input that turns a vague sense of concern into a clear, tested plan of action.
The businesses that come through economic shocks strongest are rarely the largest or the best-capitalised. They are the ones whose leaders made better decisions under pressure – because they had better input, better challenge, and better accountability than their competitors.
The Window Is Now
The SARB has given you a gift, even if it does not feel like one. Three scenarios laid out in public, with explicit guidance on what each implies for rates, inflation, and growth. That is more warning than most economic crises provide.
The businesses that will look back on 2026 as a turning point – in the right direction – are the ones that use this window. Not to panic, and not to freeze, but to get deliberate. To get the right people around the table. To pressure-test their plans before the scenarios force their hand.
If you are a Business Owner or Leader running a South African business with real revenue, real staff, and real exposure to what the SARB just described – and you are navigating it alone – it is worth asking yourself one question: why?
A TAB Peer Advisory Board will not predict which of the three scenarios unfolds. Nobody can do that. But it will ensure that when clarity arrives, your business is ready to move – confidently, decisively, and faster than the competition.
Move confidently from vision to action and improve your business in ways that will change your life.
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