South Africa’s global competitiveness ranking has undergone a significant drop with Real GDP growth per capita recording negative growth. This is a significant drop from 2018 global competitiveness whereby South Africa registered a Real GDP growth per capita of 0.22. For 2019 global competitiveness ranking, South Africa’s Real GDP growth per capita fell to -1.31. Real GDP growth per capita is “income per person or average income” and it serves as a measure of a nation’s prosperity.
South Africa also experienced a dip in its Infrastructure ranking especially Health and Higher Education who recorded a sizeable drop and are both ranked 60. This is according to the latest Institute of Management Development (IMD)‘s World Competitiveness Yearbook (WCY). In the global competitiveness rankings released by the Institute for Management Development (IMD) World Competitiveness Yearbook (WCY) of 2019, South Africa also experienced a nervy drop in its overall competitiveness with the country dropping from a ranking of 53 out of the 63 countries in 2018 surveyed by the IMD to 56 out of 63 in 2019.
South Africa dropped three places from its previous ranking (2018) in the World Competitiveness Yearbook with major challenges for 2019 cited as:
- High and increasing unemployment, especially youth unemployment.
- Low economic growth and falling contributions of primary and secondary sectors.
- Uncertainty surrounding the impending land reform programme.
- Failure of state-owned enterprises and uncovering of corruption.
- Ongoing electricity problems and adverse rolling load shedding and blackouts.
However it is not all doom and gloom for the overall performance of the South African economy with improvements in the sub sectors; Adaptability of government policy and Use of big data and analytics. The Chief Economist at Productivity SA, Dr Leroi Raputsoane says “Competitiveness of a country is a multi-pronged phenomenon given that it touches on several distinct elements, that include the performance of the economy, the state of infrastructure as well as the efficiency of government and business, which enable a country to facilitate an environment in which enterprises can generate sustainable value. As a result, a holistic approach to competitiveness is essential for the long term health of economies to enable enterprises to achieve sustainable growth, generate employment and, ultimately, enhance the prosperity of citizens”.
The WCY ranking is an annual report on the competitiveness of selected countries and is recognised internationally as the leading Executive Opinion 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 for the IMD in South Africa.
The IMD World Competitiveness Yearbook (WCY) rates the ability of 63 industrialised and emerging economies to create and maintain an environment that sustains the competitiveness of enterprises. Country data is evaluated through distinct criteria, grouped into four competitiveness factors, namely: government efficiency, business efficiency, economic performance and infrastructure. In the 2019 results, South Africa performed as follows:
- Economic performance remained stagnant with a rating of 59 in 2018 and 59 in 2019.
- Government efficiency’s performance dropped a notch from 49 in 2018 to 50 in 2019.
- Business efficiency’s performance moved up from 46 in 2018 to 44 in 2019.
- Infrastructure has recorded a major drop from 56 in 2018 to 60 in 2019.
At the top of the competitiveness rankings, Singapore toppled United States as world’s most competitive economy. Singapore jumped from 3rd position in 2018 to be ranked the most competitive economy in 2019 dropping USA to 3rd position. The top five competitive countries in the world are:
- Singapore 1 (from 3 in 2018)
- Hong Kong 2 (from 2 2018)
- USA 3 (from 1 in 2018)
- Switzerland 4 (from 5 in 2018)
- UAE 5 (from 7 in 2018)
United Arab Emirates (UAE) enters top five for the first time. Global factors that influenced competitiveness include political and economic uncertainty.