South Africa’s performance in the 2017-2018 World Economic Forum Global Competitiveness Index (WEF GCI) slipped 14 positions from the 2016-2017 WEF GCI results, leaving the country ranking 61 out of 137 economies assessed in the annual survey.
Corruption, crime and theft, as well as government instability were cited as three primary reasons why the country dropped 14 positions in the overall rankings this year, although it remains one of the most competitive countries in sub-Saharan Africa, and among the region’s most innovative ranked 39th.
Other factors related to the fall in the index released on Wednesday include tax rates, inefficient government bureaucracy, poor work ethic in the national labour force, restrictive labour regulations, inadequately educated workforce, inflation, access to financing, and policy instability.
The 2017-2018 WEF GCI also noted that South Africa’s economy is nearly at a standstill, with GDP growth forecast at just 1.0 percent in 2017 and 1.2 percent in 2018—hit by persistently low international demand for its commodities, while its unemployment rate is currently estimated above 25 percent and rising.
The survey said political uncertainty in 2017 has decreased the confidence of South African business leaders and although still relatively good in the African context, the country’s institutional environment (76th), financial markets (44th), and goods market efficiency (54th) are all rated as weaker than last year.
Brand South Africa, the official marketing agency of South Africa, said that this year’s results was a wake-up call to the nation following on two years where the country made strong progress in the global competitiveness rankings.
Brand South Africa’s chief executive Kingsley Makhubela said 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,” Makhubela said.
“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.”
Makhubela said 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. (via African News Agency)