JOHANNESBURG — South Africa is not only falling behind the rest of the world, but also behind several African countries. The latest WEF Global Competitiveness Report paints a damning picture of South Africa, which has dropped a mammoth 14 places to find itself ranked 61 out of 137 countries in the world. This is the lowest ranking for South Africa since the WEF started measuring competitiveness in 2007. What will hurt even more is that Rwanda is now ranked higher than South Africa. It’s a sad indictment on infrastructure-rich South Africa that a ‘friendly dictatorship’ like Rwanda now ranks ahead of the country. For many years already, Mauritius has already been Africa’s most competitive country. The gap between Mauritius and South Africa is now becoming ever wider – the only hope for South Africa is wholesale political change. – Gareth van Zyl
WEF press release highlights:
The Global view:
– Is the global financial system at risk to another external shock? At a time when new sources of vulnerability to the financial system are manifest, GCR data suggests banks are less sound than they were before the Crisis and in some parts of the world is declining further.
– Economies that have been able to combine labour market flexibility with robust protection of workers rights have been more successful at achieving higher employment and lower inequality
– Productivity paradox? According to GCI data, improvements in innovation are often failing to have wider impact due to slower progress in technological readiness which enables the widespread adoption of innovation across the economy and society.
The South Africa view:
– South Africa remains one of Sub-Saharan Africa’s most competitive economy although its standing is diminished. At a time when competitiveness appears to be stalling across the region (only Ethiopia, Senegal, Tanzania and Uganda have managed to improve performance consecutively for five years since 2010), South Africa itself drops 14 places to 61. This is its lowest ranking since we began using our current methodology in 2007 (its highest being 44 in 2007)
– South Africa’s decline in 2017 is almost across the board (it improves slightly in labour market efficiency and infrastructure) but three pillars stand out: Its Institutions ranking falls 36 places to 76; Financial Market Development falls 33 places to 44 and Good Market Efficiency drops 26 places to 54.
Press release from Brand South Africa:
2017-2018 WEF Global Competitiveness Index (GCI) results – a wake-up call to South Africa
Brand South Africa today noted with concern South Africa’s declined performance in the 2017-2018 World Economic Forum Global Competitiveness Index (WEF GCI). South Africa now ranks 61 out of 137 economies assessed in the annual survey.
This is a regression of 14 positions from the 2016-2017 WEF GCI results. Following on two years where the country made strong progress in the global competitiveness rankings, this year’s results is a wake-up call to the nation.
Speaking about the results, Brand South Africa’s CEO Dr Kingsley Makhubela said according to this WEF report, ‘South Africa’s declined competitiveness profile can be attributed to low GDP growth forecasts at just 1.0 percent in 2017 and 1.2 percent in 2018 – hit by persistently low international demand for its commodities’.
“It is also concerning that the financial sector has been affected by uncertainty as can be seen in the dramatic drop in performance in this indicator, while historically low levels of business confidence have now clearly impacted on the competitiveness profile of the Nation Brand. We note decreasing competitiveness in Institutions, Macro-economic environment, Goods and market efficiency, and Financial market development. Meaning that both government and the private sector should take heed of the deteriorating competitiveness indicators.”
“While we note the over-all drop in competitiveness of the South African economy, the country improved on Labour market efficiency by four positions (93/137), Infrastructure improved with three positions (61/137), and Health & Primary education with two positions (121/137).
“This means that all is not lost, however, as a nation there are several lessons to take from the WEF report indicators. As an open and transparent democratic system, leaders and public officials have to work much harder on maintaining high ethical standards in their conduct especially as it pertains to the fight against corruption and wastefulness in the public sector. Having said that, the private sector – especially in the financial sector, should pay attention to the drop in performance in the sector’s competitiveness,” said Dr Makhubela.
It is important to note that the executive opinion survey sample had drastically increased between 2016 and 2017 from 44 to 170 respectively. This means that a completely new sample informed the opinion survey conducted for the 2017 index. WEF notes that the year-on-year change in the sample constitutes a structural break in how the results are reflected. Additionally, unlike previous years, the South African Opinion Survey was solely conducted online.
“Brand South Africa will share with stakeholders a much more detailed analysis of the findings and will be working with stakeholders to establish focused efforts and implement measures that address the challenges documented in the WEF report,” concluded Dr Makhubela.