Johannesburg:Brand South Africa welcomes the release of the 2019 edition of the World Economic Forum (WEF) Global Competitiveness Index (GCI), which indicates South Africa’s over-all ranking improved position from 67 out of 140 nations in 2018, to position 60 out 141 nations in 2019.
The WEF GCI is made up of 12 pillars, each covering a unique area of performance that ultimately influences the over-all competitiveness profile of the market. It offers insights into the prospects of 141 economies, providing unique acumen into the drivers of economic growth. Competitiveness has a direct impact on the reputation of countries for several reasons, but primarily plays a role in framing an understanding of the broader environments that impact on societal productivity and efficiency. Most importantly, competitiveness is a major factor that impacts Foreign Direct Investment (FDI) decisions.
According to the GCI data, South Africa now ranks number 1 out of 141 nations for budget transparency, a significant ranking that is an illustration of the robust and transparent political governance system of the country, which is anchored on the Constitution of the Republic. This is also supported by the Open Budget Index, where South Africa ranks number 2 out of 103 nations, clearly highlighting South Africa’s high levels of transparency in its political governance system. South Africa’s ranking on judicial independence also improves markedly with fifteen positions in 2018 and currently stands at 33 out of 141 nations.
South Africa’s over-all performance in the 2019 GCI is specifically driven by improvements in Institutions, Health, and the Product Market.
- The Institutions pillar improves from 69 out of 140 to 55 out of 141 – this is due to reputational damage in the area of governance in recent years;
- Health, also historically a weaker area of SA’s performance, improves from 125 to 118 in 2019;
- Product market improves from 74 to 69 in 2019.
Speaking on the results, Brand South Africa’s General Manager for Research, Dr Petrus de Kock says; “Interestingly enough following on 2018, a year wherein local and global media carried extensive and mostly negative coverage on South Africa’s proposed Land reform policy, South Africa’s rankings in Property Rights & Quality Land Administration show improvement. This affirms the country’s strengthened competitiveness profile and a growing economy”.
While there are notable improvements, it is also important to note that there are several indicators which show negative movement that calls for urgent interventions, especially in the era of 4IR”.
Other areas that have negatively impacted South Africa’s performance include;
- The skillset of graduates declines from 85 to 102 out of 141;
- Ease of hiring foreign labour also declines from 102 to 123 out of 141;
- Attitudes towards entrepreneurial risk; the country also declines from 38 to 46 out of 141
“The Financing for SMEs declines from 72 to 96/141 as well as the attitudes towards entrepreneurial. These are particularly concerning in a period of slow GDP growth, and continued emphasis placed on the development of entrepreneurship, and to increase support for SME development,” adds Dr De Kock.
For the full report; World Economic Forum 2019. The Global Competitiveness Report – 2019. http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf
Source: Brand South Africa