South Africa has slipped slightly to number 53 in the world competitiveness rankings, released last night by IMD World Competitiveness Centre.
Despite losing ground in several key areas, including several relating to electricity and government conduct, there are some positives from the latest report.
These include improvements in GDP, gains in education and a better communications infrastructure.
South Africa’s key challenges for 2015, according to the report, are:
* Deteriorating education and high level of youth unemployment;
* Corruption undermines states credibility and service delivery;
* Inadequate infrastructure development;
* Lack of capacity in electricity generation and distribution; and
* Insufficient supply of skilled engineers and technicians.
The key attractions of the country are listed, in descending order, as: quality of corporate governance; effective legal environment; dynamism of the economy; access to financing; open and positive attitude; competitive tax regime; cost competitiveness; reliable infrastructure; policy stability and predictability; busines-friendly environment; skilled workforce; competency of government; effective labour relations; high education level; and a strong R&D culture.
In terms of economic performance, the country gained ground in 2015, rising from 56 in 2014 to 49 this year.
Government efficiency, on the other hand, slipped from 35 in 2014 to 40 in 2015.
Business efficiency fell slightly, from 51 to 52, while infrastructure remained the same at 55.
The report lists South Africa’s top economic strengths as cost of living (where it is ranked number one), office rent (ranked seven) and gasoline prices (ranked 12).
The top economic weaknesses are both the unemployment and employment rates (both ranked at 60) and youth unemployment (ranked 57).
Government efficiency scores well in effective personal income tax rates (ranked two), employer’s social security contribution rate (ranked three) and employee’s social security contribution rate (ranked five).
Government efficiency falls down on equal opportunity, social cohesion, immigration laws and government decisions, all of which are ranked at number 60. It ranks 59 for the GINI co-efficient and labour relations.
Business efficiency does well on stock market capitalisation (ranked three), finance and banking regulation (ranked nine), regulatory compliance (ranked 10) and financial risk factors (ranked 14).
Business efficiency performs badly in labour relations, workforce productivity and worker motivation, all ranked 61. In addition, labour force, entrepreneurship, skilled labour and apprenticeships all rank at number 60.
In terms of infrastructure, South Africa ranks at number three for total public expenditure on education and number seven in secondary school enrolment. The country is number 18 in terms of mobile number subscribers and ranks 32 for fixed broadband tariffs. It ranks number 24 for total health expenditure.
On the negative side, the country ranks at 61 for life expectancy at birth, energy infrastructure and health problems. It’s at number 60 for access to commodities; and 59 for primary school pupil-teacher ratio, human development index, broadband subscribers and future energy supply. It ranks 58 in terms of Internet access and science in schools.