At the start of 2025, South Africa had every reason to be optimistic. The South African Reserve Bank projected a formidable 1.8% economic growth forecast, fuelling optimism for job creation and expanded development. However, the recently released 2025 World Competitiveness Yearbook (WCY) by Switzerland’s Institute of Management Development (IMD), in collaboration with Productivity SA, painted a sobering picture of the country’s global standing.
Productivity SA, the custodian of South Africa’s productivity movement and a public entity under the Department of Employment and Labour, with a mandate to promote employment growth and productivity, officially unveiled the country’s competitiveness rankings at an event held on Wednesday, 18 June 2025.
In presenting the results, Productivity SA’s Chief Economist, Juliet Mashabela, announced that “South Africa has fallen to a lowly ranking of 64th out of 69 countries surveyed for the 2025 global competitiveness rankings”, a drop of four places from 2024.
The IMD World Competitiveness Ranking assesses how well countries create and sustain an environment that fosters business competitiveness. The 2025 rankings covered 69 countries, evaluating four key pillars: economic performance, government efficiency, business efficiency, and infrastructure. South Africa’s performance declined across all these pillars. Alarming regressions were observed in international investment, falling 31 places to 46th and Labour market performance, plunging 40 places to 55th. However, the country maintained some strengths, ranking 7th in the prices sub-factor and 22nd in tax policy
Though these too represent a three-place drop from the previous year.
Continentally, South Africa now lags behind both Botswana and Kenya. Globally, Switzerland regained its position as the world’s most competitive economy, followed by Singapore and Hong Kong.
The IMD report combines statistical data and executive opinions, with Productivity SA serving as the official partner and data provider for South Africa. According to Mashabela, productivity is the missing link in South Africa’s economic revival. “Productivity and efficiency are in the driver’s seat of the competitiveness wagon. South Africa must prioritise optimising its labour market and modernising policies and regulations to strengthen its global position.” She emphasised that improved productivity is not a luxury, but an economic imperative. One vehicle to steer the country in the right direction is the Medium-Term Development Plan (MTDP) 2024–2029, a critical framework aligned to the final phase of the National Development Plan (NDP) Vision 2030.
The MTDP outlines three strategic priorities, Driving Inclusive Economic Growth and Job Creation, Reducing Poverty and Tackling the High Cost of Living and Building a Capable, Ethical, and Developmental State. These goals cannot be realised without productivity gains across the public and private sectors. South Africa’s productivity levels have stagnated in recent years, a reality that the 2025 IMD Competitiveness Rankings clearly reflect.
As highlighted by the Deputy Minister of Employment and Labour, Honourable Judith Nemadzinga-Tshabalala, South Africa’s ranking is not just a number — it reflects structural weaknesses that undermine job creation and economic competitiveness. With youth unemployment still alarmingly high at 46.1% and average productivity levels below the global norm, urgent and targeted interventions are needed to reverse the trend.
The Deputy Minister further outlined four government priority areas to address these challenges: labour market reforms, enhanced support for enterprise productivity (especially for SMMEs), skills alignment for youth employment, and improved infrastructure and investment coordination. These actions reinforce the pivotal role of Productivity SA in scaling national productivity programmes and supporting sustainable enterprise development.
“Productivity SA must not only be a delivery agency—it must be a strategic partner in South Africa’s recovery and long-term competitiveness,” the Deputy Minister affirmed, calling for greater budgetary support and integration of Productivity SA into national planning and performance monitoring frameworks.
The release of South Africa’s competitiveness results coincides with World Productivity Day, observed globally on 20 June. This year’s theme — “Accelerating Productivity for Sustainable Development”, could not be more relevant. World Productivity Day is a reminder that productivity is the fuel of competitiveness, innovation, and ultimately, sustainable economic growth. Around the world, organisations mark this day by hosting forums, workshops, and discussions on how to boost performance, encourage innovation, and increase efficiency. As a country, South Africa must take this opportunity to reflect, reset, and reimagine its approach to productivity. Low productivity not only affects global rankings — it limits job creation, hampers service delivery, and weakens investor confidence.
In light of these challenges, Productivity SA has renewed its call for government, industry, and labour to rally around the productivity agenda. With a mandate to promote employment growth and productivity to advance socio-economic development and competitiveness, Productivity SA is committed to driving interventions that support sustainable enterprises, build productive capacity, and contribute to inclusive economic growth.
The IMD Competitiveness Report is more than a set of rankings, it is a mirror to our reality. As South Africa reflects on its standing this World Productivity Day, the message is clear: Without productivity, there can be no competitiveness. Without competitiveness, there can be no shared prosperity.
