South Africa has been ranked 81 out of 180 countries in the 2017 Index of Economic Freedom, with an overall economic freedom score of 62.3, making it a “moderately free” economy.
The score is up by 0.4 points from 2016 when it scored 61.9.
Released by the Heritage Foundation, the Index covers 10 types of economic freedom, grouped into four categories – from property rights to entrepreneurship. Each of these categories is graded on a scale of 0 to 100, where a higher score is indicative of a better performance.
South Africa’s improvement in the rankings comes as a result of advancements in the areas of property rights which is up from 50 in 2016 to 67.6 in 2017, government integrity scores at 47.6 in 2017 compared to 44 in 2016, and this year, judicial effectiveness ranks at 59.7– all of which form part of the Rule of Law category in the 2017 Economic Freedom Index.
Brand South Africa has welcomed the news. “South Africa’s property rights are relatively well protected, and contracts are generally secure hence the improvement to 67.6 in 2017,” says Dr Kingsley Makhubela, CEO of Brand SA.
“The World Economic Forum’s Global Competitiveness Index (WEF GCI) indicates that South Africa benefits from strong institutions and an independent legal framework, and therefore it is no surprise that our strongest performance indicator in this index is anchored on the category of Rule of Law.”
South Africa’s financial sector continues to be one of the largest among emerging markets. Positioned at 81 from 180 countries, with the overall economic freedom score of 62.3 — the country continues to outperform its BRICS counterparts.
China ranks 111 of 180 countries, with a score of 57.4 for economic freedom, Russia is positioned at 114 of 180 countries with a score of 57.1 for economic freedom, Brazil and India are ranked at 140 and 143 of 180 countries and both have economic freedom scores of 52.9 and 52.6 respectively.
“We are pleased with the upward trend of the nation’s competitive performance, particularly since 2017 was a year of great concern which saw South Africa slip into a technical recession for the time since 2009, which it moved out of after the economy expanded by 2.5% in the second quarter of 2017,” says Dr Makhubela. “The country also experienced a declined performance in the 2017-2018 WEF GCI, which sees the country’s ranking at 61 out of 137 economies assessed in the annual survey — a regression of 14 positions from the 2016-2017 WEF GCI results.
“It is therefore promising that South Africa, according to the 2017 Index of Economic Freedom, is ‘moderately free’ in terms of its economic activity. Economic freedom is about much more than a business environment where business flourishes, it has a far reaching impact on other aspects such as human development and the power of choice. Consequently, it remains imperative for South Africa to continue safeguarding openness to its market, government size and rule of law.”
