South Africa hits all time low in competitiveness ranking



MEDIA RELEASE 17 JUNE 2020

TO ALL JOURNALISTS AND NEWS EDITORS

RE: SOUTH AFRICA HITS ALL TIME LOW IN COMPETITIVENESS RANKING
Faced with sluggish economic growth and in the mist of the global Covid-19 pandemic, South Africa has hit its lowest global competitiveness ranking according to the latest World Competitiveness Yearbook (WCY) compiled by Switzerland based Institute of Management Development (IMD).
According to the 2020 WCY, South Africa fell by three notches to be ranked 59 out of 63 countries rated by the IMD. The IMD’s WCY is an annual report that ranks the competitiveness of 63 selected countries and is recognised internationally as the leading survey of competitiveness between nations. The rankings are drawn from a combination of hard data and an Executive Opinion Survey.  Productivity SA is the information partner institute for the IMD in South Africa. 
The Chief Economist at Productivity SA, Dr Leroi Raputsoane, says “South Africa’s global competitiveness ranking in 2020 marks the lowest rating since the inception of the IMD’s yearbook".  Dr Raputsoane says, "whereas the country recorded a reasonably good level of global competitiveness between 2000 and 2006 averaging below 40 of the 63 countries, the best being 37 in 2001 and 2005, respectively, South Africa’s performance has been on a downward trend since 2007". 
The Chief Economist concludes "this is a worrying factor in a country with high rates of unemployment, poverty and inequality and it calls for policy reform to enable a sustainable business environment". 
The WCY rates the ability of 63 industrialised and emerging economies to create and maintain an environment that empowers enterprises to generate sustainable value thereby ensuring long term profitability, ability to generate employment and to ultimately enhance the welfare of their citizens. According to the IMD ‘s 2020 WCY, the drop in South Africa’s global competitiveness ranking was underpinned by the following factors:

• Deteriorating headline and youth unemployment
• Rising public debt levels amid a shrinking fiscal space
• Lack of decisive plans to revive the struggling economy
• Ongoing electricity supply problems and rolling blackouts
• Sluggish legal process to address corruption in state owned enterprises
The WCY evaluates each country’s data based on about 346 distinct criteria, which are grouped into 4 factors, where South Africa performed as follows among the 63 selected countries:

• Economic performance  - dropped to 61 in 2020 from 59 in 2019.
• Government efficiency  - dropped to 54 in 2020 from 50 in 2019.
• Business efficiency   - dropped to 56 in 2020 from 44 in 2019.
• Infrastructure   - dropped to 61 in 2020 from 60 in 2019. 
The following countries topped the global competitiveness rankings:
• Singapore  - 1 in 2020 from 1 in 2019.
• Denmark  - 2 in 2020 from 8 in 2019.
• Switzerland  - 3 in 2020 from 4 in 2019.
• Netherlands - 4 in 2020 from 6 in 2019.
• Hong Kong  - 5 in 2020 from 2 in 2019.

The WCY 2020 further shows that the BRICS countries performed as follows

• Brazil  - 56 in 2020 from 59 in 2019.
• Russia  - 50 in 2020 from 45 in 2019.
• India   - 43 in 2020 from 43 in 2019.
• China  - 20 in 2020 from 14 in 2019.
• South Africa - 59 in 2020 from 56 in 2019.

The Director of the IMD World Competitiveness Center and Professor of Finance, Arturo Bris, says "There is no single nation in the world that has succeeded in a sustainable way without preserving the prosperity of its people. Competitiveness refers to such an objective: It determines how countries, regions and companies manage their competencies to achieve long-term growth, generate jobs and increase welfare.  ENDS
For more information, contact the Productivity SA media liaison office, Maupi Monyemangene, on 011 848 5397/ 0824473232 or send an e mail: maupim@productivitysa.co.za 
or
Chief Economist at Productivity SA, Dr Leroi Raputsoane on (011) 848 5333 or send an e mail: leroir@productivitysa.co.za.

Issued by: Productivity SA