South Africa is likely to be the most business-friendly country in Africa, leading up to 2018. This according to The Economist’s Intelligence Unit’s Business Environment Rankings (BER).
The IU’s business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports.
Looking at Africa
South Africa ranks as the best market for business – at 54th overall. However, this is down two places from the 2009-2013 report.
According to The Economist, South Africa’s rank slip reflects divisions within the ruling African National Congress, high crime rates (especially for violent crime), deep-seated inequality and strikes and rigid labour laws, it said.
“However, South Africa remains comfortably the best scoring country in SSA,” the group said.
Overall, The Economist Intelligence Unit placed the Middle East and Africa region in the bottom in seven of the ten business environment categories, noting that the region hosts three of the four lowest-ranking countries in the overall rankings: Libya, Iran and Angola.
“Two other Sub-Saharan countries—Kenya and Nigeria—also rank at the lower end of our rankings, held back by the ongoing problems of corruption, weak infrastructure, deteriorating security and, in the case of Nigeria, the absence of effective government institutions,” The Economist said.
How the world compares
According to the Economist, the BER is designed to reflect the main criteria used by companies to formulate their global business strategies, and is based not only on historical conditions but also on expectations about conditions prevailing over the next five years.
The BER shows that developed economies in North America, Western Europe and Asia remain the best places to do business.
Singapore looks set to remain the world’s most investor-friendly location in 2014-18, retaining its number-one spot from the 2009-13 period. Switzerland and Hong Kong also defend their second and third place position, with Cananda, Australia, Sweden and USA following. The remainder of the top ten is New Zealand, Finland and Denmark.
Asia has had mixed fortunes with top-performing countries (Singapore and Hong Kong) balancing out the low performers (Bangladesh and Pakistan) in the rankings.
The Americas, however, with the USA as the world’s biggest economy, remains “an indispensable business destination”, The Economist said.
Download the full report here.