The International Institute for Manager Development (IMD) has released its annual Competitiveness Report, ranking 61 countries, including South Africa, according to their ability to effectively compete on a global scale.
In the 2016 iteration, South Africa managed to increase its ranking by one place – though the country remains at the lower-end of the list, out of sync with its population size and economic weight.
The report is based on data from international organizations (IMF, World Bank, etc) as well as private firms – with further information gained from surveys with top executives and managers.
South Africa was ranked 52nd out of 61 countries, dragged down by its poor performance across 18 indicators where the country was ranked last or second last (60th or 61st).
This is compared to the 6 indicators where South Africa ranked first or second.
Notably, when measuring the key attractiveness factors for South Africa – which is based on responses from business leaders – not a single response was given in favour of government, where government competency scored a rating of exactly 0%.
According to the report, the country’s legal framework (79.2%), levels of corporate governance (68.8%) and cost competitiveness (64.6%) were the most attractive features of the country.
Strengths and weaknesses
IMD’s analysis found that South Africa is the most affordable country to do business in out of all the country’s measured – and the country benefits from having highly developed financial systems.
Across the report’s 340 criteria analysed, these are the 6 areas in which South Africa shows the most strength:
- Cost of living (1st)
- Secondary school enrollment (1st)
- Cost of office rent (2nd)
- Export concentration (2nd)
- Effective personal income tax (2nd)
- Stock market capitalization (2nd)
However, on the down side, South Africa’s weaknesses cannot be ignored – massive labour and health problems, coupled with high levels of pay disparity, inequality and a poor education system, drag the country down.
These are the 18 areas where South Africa performs the worst:
- Unemployment rate (61st)
- Relocation threats of production (61st)
- Labor relations (61st)
- Life expectancy at birth (61st)
- Health problems (61st)
- Youth unemployment (60th)
- Employment (%) (60th)
- Relocation threats of R&D facilities (60th)
- Relocation threats of services (60th)
- Gini coefficient (60th)
- Immigration laws (60th)
- Equal opportunity (60th)
- Workforce productivity (60th)
- Worker motivation (60th)
- Human development index (60th)
- Access to water (60th)
- Educational system (60th)
- Future energy supply (60th)
Source: Business Tech