SA has fallen four places — to 64th out of 69 countries — in the latest rankings of economic competitiveness as measured by the influential IMD World Competitiveness Center.
Switzerland, Singapore and Hong Kong topped the latest annual rankings, “reflecting their strong performance in global indicators of quality of life”, the IMD said in a statement accompanying the rankings.
Countries exhibiting lower levels of socioeconomic and political polarisation achieved higher scores, while government policies that were conducive to long-term competitiveness had emerged in this year’s rankings as “a decisive factor for economies managing today’s fragmented sociopolitical environment”, it said.
The rankings, which have been conducted by the Lausanne-based International Institute for Management Development for the past 37 years, combine hard data on a series of indicators with surveys of business executives to measure economies in terms of government efficiency, infrastructure, economic performance and business efficiency.
At 64th, SA is behind Argentina and Ghana but slightly ahead of Namibia and Nigeria. It came in 42nd of the 45-country peer group the IMD ranks in Europe, the Middle East and Africa, down from 38th in 2021. It ranked best on business efficiency — ranking 57th — but worst on economic performance and government efficiency.
The IMD cited SA’s high unemployment rate and lack of employment opportunities as challenges, along with corruption and poor government effectiveness.
It also pointed to SA’s “poorly located and inadequate infrastructure that limits social inclusion and economic growth”, as well as rising public debt levels amid shrinking fiscal space and a “lack of decisive plans to revive the struggling economy”.
SA was credited with its success in fighting inflation, with the IMD ranking it seventh on the list of countries for “prices”. Other indicators on which it ranked well were tax policy (25), international trade (44) and finance. But it was near the bottom of the table on employment, with a ranking of 67, as well as on health and environment (64).
“Government efficiency and fragmentation are highly connected, “said Arturo Bris, director of the IMD World Competitiveness Center. “Economic and political consensus creates stability, and vice versa.”
“The top 10 economies all maintain strong institutional frameworks, robust infrastructure and adaptive governance models, which is what is required to remain competitive in today’s fragmented world in which currency risk has become a strategic priority, together with protecting domestic needs.”
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