Professional services firm Grant Thornton International’s 2013 Global Dynamism Index (GDI) has revealed that South Africa’s main growth drivers were underperforming, making the country a less attractive place to do business over the past 12 months.

South Africa’s overall GDI score was 44.1, down from the 2012 score of 50, and the country was ranked fifty-second out of sixty economies in the GDI 2013 report, a decline from its forty-third position out of fifty countries in 2012.

“South Africa’s scores in the 2012 GDI compared to that of 2013 highlights a stagnant economy with no improvement in any of the performance indicators within the data,” Grant Thornton said on Wednesday.

Grant Thornton Johannesburg CEO Andrew Hannington pointed out that while South Africa’s global ranking according to its gross domestic product (GDP) was twenty-ninth, when specific economic drivers were measured the country ranked much lower.

“One would expect our general scores to all be around our GDP score of twenty-ninth as a benchmark, but sadly in this GDI they’re dramatically worse than that, which means we’re unlikely to see growth higher than the current 2%,” he noted.

The Grant Thornton GDI measured five key drivers of dynamism, which included economics and growth, in which South Africa ranked thirty-forth, the financing environment, in which South Africa ranked thirty-ninth and business operating environment, where South Africa ranked forty-third.

Other drivers measured were science and technology and labour and human capital, in which South Africa ranked forty-seventh and fifty-fifth respectively.

“Our GDI rankings mirror the recent World Economic Forum’s (WEF's) 2013/14 Global Competitiveness Report," Hannington said. 

“While the GDI is a measure of change and the WEF report is more static, both indicate that the unresolved labour issues continue to dog South Africa. The economy ranks in the bottom six for labour and human capital in the GDI, while three out of five critical poor performing areas in the WEF Report related to labour concerns,” he added.

Meanwhile, the Grant Thornton 2013 GDI found the North American region to be the most dynamic in the world, scoring 61.4 out of 100 points, with developed Asia in a close second, scoring 60.8 and the Asia Pacific region ranking third globally.

The Brazil, Russia, India and China- (Bric-) economies scored 50.9 out of 100 base points overall, however, China had streaked ahead of its Bric counterparts in terms of the development of its business growth environment.

“GDI 2013 reveals that while the Chinese economy has significantly improved its attractiveness as a place to do business over the last twelve months, Russia, India and Brazil have fallen away and face significant challenges,” Grant Thornton stated. 

“The index suggests the Brics countries, which also includes South Africa, are no longer travelling together. The growth of all have slowed over recent months, but it appears China is handling this transition most effectively – certainly as far as prospects for business growth are concerned,” Hannington said.

He added that the challenge for the other Brics countries, which seemed to be struggling with similar concerns to those in South Africa, was to manage the specific issues revealed by the index and develop their attractiveness to stimulate growth.

Hannington urged government to critically assess the low growth rate in South Africa. 

“We need to incentivise business to create jobs and to improve business sentiment so that we can truly begin to re-energise and encourage much-needed foreign direct investment.  The jobs for youth proposals need to be speedily executed,” he stated.