South Africa
The Rainbow Nation placed second in Africa and 60th in the world. Here’s what the report said: “South Africa’s competitiveness has regained momentum after the recent political landscape shift and climbs 7 places to 60th. The country is a regional financial hub (83.2, 19th), with well-developed equity, insurance and credit markets, all achieving a score of 100. South Africa has also developed one of the most advanced transport infrastructures in the region (58.7, 45th) and is among the top countries in Africa for market size (68.6, 35th). Beyond these established strengths, health conditions—though starting from a low base (118th)—are better, adding 3.3 years to the average healthy life expectancy since the last assessment. Institutional quality has also improved (+3.3 points, 55th) but unevenly. Some aspects of this category have achieved remarkable progress, including restored balance of powers across different state’s entities (+7.7 points, 16th), enhanced administrative efficiency of the public sector (+6.3, 39th) and corporate governance (+3.3, 26th). By contrast, other aspects continue to perform poorly: security (42.7, 135th) remains one of the main restraints to South Africa’s competitiveness, while transparency (43.0, 62nd) and government adaptability to change (39.6, 100th) are also below par. Further, South Africa’s competitiveness is being held back by relatively low business dynamism (61.9, 60th), which is inhibited by insolvency regulation and administrative burdens to start a business, and a persistently insufficient labour market flexibility (52.1, 111th). For instance, flexibility of wage determination is limited (41.1, 134th) and hiring foreign labour is difficult (40.6, 123rd). South Africa’s sensitivity to exports of mineral resources is likely to hit the country’s economic outlook and will make reducing unemployment (projected above 27%) challenging. Against this backdrop, structural reforms are needed to re-ignite the economy and offer better opportunities to a larger share of South African citizens.”
