Publications
Partners
Johannesburg - Corruption was cited as one of the biggest obstacles in creating a competitive business environment in South Africa, as the country dropped 14 places in the World Economic Forum’s (WEF’s) Competitiveness Index.
The index, released on Wednesday, said South Africa’s economy was at a standstill.
South Africa’s overall ranking now sits at 61 out of 137 countries, its worst ranking since 2007. It is now only the third highest ranked sub-Saharan African country, with Mauritius taking top spot at 45 and Rwanda coming in second at 58.
The latest WEF ranking comes as thousands of workers take to the streets in protest of state capture and corruption in a nationwide march organised by Cosatu and the South African Communist Party (SACP).
The erosion of South Africa’s institutions and financial was one of the most damning findings in the index, with the country's rankings sliding significantly.
The report listed corruption, crime and theft and government instability as dampening South Africa’s business environment.
The report stated that despite its slide South Africa remained one of the most competitive countries in sub-Saharan Africa, and among the region’s most innovative.
“South Africa’s economy is nearly at a standstill, with GDP growth forecast at just 1% in 2017 and 1.2% in 2018,” the report said, adding that South Africa was hit by persistently low international demand for its commodities.
It said unemployment was a concern, with estimates putting it at 25% and rising.
But it was corruption and political uncertainty that was South Africa’s current downfall, the WEF said.
“Political uncertainty in 2017 has decreased the confidence of South African business leaders. Although still relatively good in the African context, the country’s institutional environment, financial markets and goods market efficiency are all rated as weaker than last year.”
South Africa also dropped from number one to number 30 in the WEF rankings of the quality of auditing and reporting standards in the index, and its institutional environmental ranking had plummeted 36 places to 76.
Switzerland topped the WEF’s competitiveness index, with the US in second place.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
