Competitiveness report: South Africa slips to 67th from the world’s 140 largest economies

The economic position of South Africa against 140 of the world’s largest economies has progressed slowly over the years. However, in 2018, it seems to have fallen short a few places and currently ranks at 67th, the lowest it has ever ranked.

This is according to an article titled SA’s Global Competitiveness – What’s Going On? authored by Steuart Pennington.

Pennington relied on the World Economic Forum’s Global Competitiveness Report (WEF-GCR), to provide a detailed perspective on South Africa’s updated ranking.

How is the economic ranking of each country measured?

The WEF, on a yearly basis, looks at each country’s institutions and policies and also factors in its Growth Domestic Product (GDP) – a monetary measure of the market value of all the final goods and services produced in a period of time.

The report extended on how it views competition and what it considered in measuring the competitiveness of each economy.

“We define competitiveness as the set of institutions, policies, and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be reached by an economy.

“The productivity level also determines the rates of return obtained by investments in an economy, which in turn are the fundamental drivers of its growth rates. In other words, a more competitive economy is one that is likely to grow faster over time,” the report states.

In what is called the 12 pillars of competitiveness, these are the categories the report considers for assessing each economy.

1. Institutions
2. Infrastructure
3. Macroeconomic environment
4. Health and primary education
5. Higher education and training
6. Goods market efficiency
7. Labour market efficiency
8. Financial market development
9. Technological readiness
10. Market size
11. Business sophistication
12. Innovation

South Africa ranks 67th out of 140 of the world’s largest economies

Pennington revealed that this is the lowest ranking South Africa has ever received. According to a table that displays the country’s ranking between 2012 and 2018, one can see that it was only two years ago that the country ranked at 47th.

South Africa, based on its performance on the measurement of the 12 pillars of competitiveness, came back with a score of 60.8.

According to Pennington, this is not all too bad, considering that we are still one of the two biggest economies in Africa and the biggest in Sub-Sahara Africa.

“Among its strengths, South Africa is home to a large market size (68.4), good infrastructure (68.6) and a well-developed financial system (82.1, 18th).

“More specifically, South Africa’s financial sector offers a relatively balanced access to various sources of finance, including credit (100.0, 11th), venture capital (33.0, 63rd), equity (100.0, 2nd) and insurance (100.0, 3rd). In addition, South Africa’s innovation capability is relatively advanced (44.3, 46th), although limited by insufficient research and development (37.5).” he added.

Some of the key weaknesses that stood out were the country’s ongoing battle with its healthcare system, which scored a low 43.2 (125th out of 140) and security which is among the worst in the world.