Sep 05, 2012
SA remains region’s most competitive, ranked third among BricsBack
© Reuse this
The country is ranked 52nd this year, down from 50th in 2011, and is placed third among the Brazil, Russia, India, China and South Africa (Brics) economies. Last year, South Africa was ranked second among the Brics nations, but was overtaken by Brazil this year.
The 2012/13 report added Liberia and Seychelles to its list, bringing the total number of countries considered to 144.
Switzerland and Singapore retained their positions as first and second most competitive countries, while Finland replaced Sweden in third place, moving up from fourth place last year.
But despite remaining the highest-ranked in region, the WEF pointed out that South Africa would need to address some weaknesses, such as labour, to further enhance its competitiveness.
The country’s labour-market efficiency ranking fell 18 places from last year to 113th, with rigid hiring and firing practices (143rd), a lack of flexibility in wage determination by companies (140th), as well as tensions in labour-employer relations (144th).
The WEF stated that efforts should also be made to increase the local university enrolment rate to better develop South Africa’s innovation potential.
“Combined efforts in these areas will be critical in view of the country’s high unemployment rate of almost 25% in the second quarter of 2012,” the report read.
Further, the index found that South Africa’s infrastructure, although good (63rd) by regional standards, required upgrading.
The poor security situation remained another important obstacle to doing business in South Africa, while the high business costs of crime and violence (134th) and the sense that the police force were unable to provide sufficient protection from crime (90th) did not contribute to an environment that fostered competitiveness.
The health of the workforce, which ranked 132nd out of 144 economies, was also found to be another point of concern.
The WEF pointed out that South Africa performed particularly well in the ‘financial market development’ pillar, ranking third. This indicated high confidence in the country’s financial markets when trust is returning slowly in many other parts of the world.
Africa’s largest economy also fared well on the quality of its institutions and on factor allocation, such as intellectual property protection (20th), property rights (26th), the accountability of its private institutions (2nd) and its goods market efficiency (32nd).
Further, South Africa performed reasonably well in more complex areas such as business sophistication (38th) and innovation (42nd), benefiting from good scientific research institutions (34th) and strong collaboration between universities and the business sector in innovation (30th).
More generally, sub-Saharan Africa had significant growth over the last 15 years, registering growth rates of over 5% in the past two years. The WEF noted that the region continued to exceed the global average and to exhibit a favourable economic outlook.
The region has recovered rapidly from the global economic crisis, when gross domestic product growth dropped to 2.8% in 2009.
However, the report stated that sub-Saharan Africa still lagged behind the rest of the world in terms of its competitiveness, requiring efforts across many areas to place it on a firmly sustainable growth and development path going forward.
Although growth in middle-income countries in the region, such as South Africa, seemed to have followed the global slowdown more closely, lower-income and oil-exporting countries have been largely unaffected. These regional variations were reflected in the latest rankings.
Mauritius retained its placing at 54th, the second-highest ranked country in sub-Saharan Africa.
Rwanda’s moved up seven places to 63rd position, continuing to place third in the region.
The Seychelles entered the index for the first time, at 76th overall and 4th in the region.
Botswana improved slightly, up one place to 79th and is one of the top five economies in the region.
However, Namibia continued its downward trend and fell nine places to 92nd place, with weakening across most areas measured by the index.
Ghana was ranked 103rd, moving up by 11 places since last year, while Kenya came in at 106th, showing a relatively steady performance.
Liberia also entered the rankings for the first time and achieve 111th place, and Nigeria improved to the 115th place after some deterioration over recent years.
Further, Tanzania and Zimbabwe remained stable at 120th and 132nd respectively, while Mozambique fell to 138th from 133rd last year.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Creamer Media Senior Researcher and Deputy Editor Online
Other Economy News
Updated 4 hours ago The National Empowerment Fund (NEF) has, since its inception in 2005, approved funding of R6.6-billion in 688 transactions, supporting over 82 900 jobs. Nearly R4.6-billion had been disbursed to companies, while over R1-billion had been repaid by investees.
Updated 4 hours ago French conglomerate Bollore may have to halt work on the Niger to Benin section of its giant West Africa rail project after a rival company won a court order to stop it going ahead. The dispute concerns rival rail schemes in the area.
Updated 4 hours ago A week ahead of the second annual gathering of the Forum on China–Africa Cooperation (Focac), in Johannesburg, the JSE is rolling out the proverbial red carpet for Chinese investors looking to Africa’s largest bourse for possible investment opportunities, calling...
Updated 4 hours ago The South African National Roads Agency Limited (Sanral) applied for leave to appeal on Friday against the Western Cape High Court judgment that set aside the approvals that would enable it to toll sections of the N1 and N2 freeways in Cape Town. This prompted the...
Recent Research Reports
Water 2015: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2015 Report considers the aforementioned issues, not only in the South African context but also in the African and global context in terms of supply and demand, water stress and insecurity, and access to water and sanitation, besides others.
Input Sector Review: Pumps 2015 (PDF Report)
Creamer Media’s 2015 Input Sector Review on Pumps provides an overview of South Africa’s pumps industry with particular focus on pump manufacture and supply, aftermarket services, marketing strategies, local and export demand, imports, sector support, investment...
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
This Week's Magazine
The BMW Group will invest R6-billion at BMW Group South Africa’s (BMW SA’s) Rosslyn plant to produce the next-generation X3 sports-activity vehicle (SAV) for the local and export markets. Rosslyn will continue production of the current 3 Series through its lifecycle,...
The lack of consequences for poor performance and transgressions on the part of contractors remains a significant hurdle to tackling South Africa’s service delivery challenges, delegates heard at the Consulting Engineers South Africa Infrastructure Indaba, on...
City of Ekurhuleni executive mayor Mondli Gungubele earlier this month officially named the city’s bus rapid transit (BRT) system, Harambee.
About 58% of unstructured data stored by companies is dark data, which means that the value or regulatory importance of the data has not been determined. Subsequently, most of the stored data add costs, rather than increasing revenue or reduce regulatory risks, says...
Effective logistics, import/export and manufacturing consulting services require detailed industry knowledge and experience, but can add significant value to these industries by providing expert advice on various technical elements in their value chains, says...