South Africa most competitive country in Africa – report

South Africa has been ranked as the most competitive African country in The Global Competitiveness Report 2010–2011 index.

South Africa ranks in the 54th position out of a total of 139 featured economies.

The top ten ranked African countries are as follows:

  • South Africa (54)
  • Mauritius (55)
  • Namibia (74)
  • Morocco (75)
  • Botswana (76)
  • Rwanda (80)
  • Egypt (81)
  • Algeria (86)
  • The Gambia (90)
  • Libya (100)

In 139th position, Chad is the lowest ranked country, both in Africa and globally.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.

The full report contains the following commentary on South Africa:

South Africa remains the highest ranked country in sub-Saharan Africa. While it has dropped somewhat in rank since last year, its performance has in fact remained stable and the decline reflects improvements in other countries. South Africa still benefits from the large size of its economy, particularly by regional standards (it is ranked 25th in the market size pillar). It also does well on measures of the quality of institutions and factor allocation, such as intellectual property protection (27th), property rights (29th), the accountability of private institutions (3rd), and goods market efficiency (40th).

Particularly impressive is the country’s financial market development (ranked 9th), indicating high confidence in South Africa’s financial markets at a time when trust has been eroded in many other parts of the world. South Africa also does reasonably well in more complex areas such as business sophistication (38th) and innovation (44th), benefiting from good scientific research institutions (ranked 29th) and strong collaboration between universities and the business sector in innovation (ranked 24th).

While a number of attributes therefore make South Africa the most competitive economy in the region, in order to further enhance its competitiveness it will need to address some weaknesses. The country ranks 97th in labour market efficiency, with inflexible hiring and firing practices (135th), a lack of flexibility in wage determination by companies (131st), and poor labour-employer relations (132nd).

Efforts must also be made to increase the university enrolment rate of only 15%, which places the country 99th overall, in order to better develop the country’s innovation potential. In addition, South Africa’s infrastructure, although good by regional standards, requires upgrading (ranked 63rd) beyond what has been achieved in the preparations for the 2010 World Cup. The poor security situation remains another important obstacle to doing business in South Africa. The business costs of crime and violence (137th) and the sense that the police are unable to provide protection from crime (104th) do not contribute to an environment that fosters competitiveness.

Another major concern remains the health of the workforce, ranked 127th out of 139 countries, the result of high rates of communicable diseases and poor health indicators more generally. Improvements in these areas will enhance South Africa’s productivity and competitiveness.

Switzerland tops the overall rankings in The Global Competitiveness Report. The United States fell two places to fourth position, overtaken by Sweden (2nd) and Singapore (3rd), after already ceding the top place to Switzerland last year.