Johannesburg - South Africa has improved its ranking and
remains the highest-ranked country in sub-Saharan Africa on the World Economic
Forum's (WEF's) global competitiveness index, released on Wednesday.
"South Africa moves up by four places to attain 50th
position this year, remaining the highest-ranked country in sub-Saharan Africa
and the second-placed among the Brics (Brazil, Russia, India, China, South
Africa) economies," according to the Global Competitiveness Report
2011-2012.
The report found that South Africa benefits from the large
size of its economy, particularly by regional standards - it is ranked 25th in
market size.
"It also does well on measures of the quality of
institutions and factor allocation, such as intellectual property protection
(30th), property rights (30th), the accountability of its private institutions
(3rd), and its goods market efficiency (32nd)."
The report said South Africa's financial market development
- in which it ranked fourth - was "particularly impressive" and
showed "high confidence in South Africa's financial markets at a time when
trust is returning only slowly in many other parts of the world".
"South Africa also does reasonably well in more complex
areas such as business sophistication (38th) and innovation (41st), benefiting
from good scientific research institutions (30th) and strong collaboration
between universities and the business sector in innovation (26th)."
This made South Africa the most competitive economy in the
region.
The country would, however, need to address some weaknesses
- particularly on labour issues - to improve its competitiveness.
"South Africa ranks 95th in labour market efficiency,
with rigid hiring and firing practices (139th), a lack of flexibility in wage
determination by companies (138th), and significant tensions in labour-employer
relations (138th)."
The report said university enrolment rates were too low.
"Efforts must also be made to increase the university
enrolment rate of only 15%, which places the country 97th overall, in order to
better develop its innovation potential."
Infrastructure was good by regional standards, but needed
upgrading.
"The poor security situation remains another important
obstacle to doing business in South Africa.
"The business costs of crime and violence (136th) and
the sense that the police are unable to provide protection from crime (95th) do
not contribute to an environment that fosters competitiveness."
The report also found that workforce health, ranked 129th out of 142 economies, was concerning.
Switzerland topped the overall rankings, Singapore was
second, and Sweden was in third position.
In compiling the report, the WEF's Centre for Global
Competitiveness and Performance looks at the business operating environment and
competitiveness of over 130 economies worldwide.