South Africa World Competitiveness Ranking 2023 Media Release

South Africa’s World Competitiveness ranking stagnates.

South African Businesses have cited energy security, inflationary pressure, global recession and socio-economic disparity as major obstacles to South Africa ‘s competitiveness. This is according to the 2023 World Competitiveness Yearbook (WCY) released today by the Swiss based Institute of Management Development (IMD) in partnership with South African government agency, Productivity SA.

Speaking at the release of the 2023 WCY by the Swiss based Institute of Management Development (IMD) at Productivity SA, the Senior Economist at Switzerland ‘s Institute of Management Development , Dr José Caballero, “said Small Medium Enterprises (SMEs,) and entrepreneurship are key drivers for South Africa ‘s competitiveness”.

South Africa’s international competitiveness ranking deteriorated slightly to 61 in 2023 from 60 in 2022. The latest decline in the World competitiveness ranking follows 2 years of underperformance in the rankings since 2021. This is according to the 2023 WCY. Speaking at the release of the report, Productivity SA Chief Economist, Dr Leroi Raputsoane said “this sustained weakness in international competitiveness ranking continues to signify the inability of the country to generate a conducive environment for business”.

The IMD WCY is an annual report that ranks the international competitiveness of selected countries, 64 in 2023 from 63 in 2022. The IMD WCY is recognised internationally as the leading Survey of competitiveness between nations. The World Competitiveness rankings are drawn from a combination of Hard data and an Executive Opinion Survey. Productivity SA is the information partner institute for the IMD WCY in South Africa. Productivity SA is an entity of the Department of Employment and Labour (DEL) and is responsible for employment preservation and creation among other functions.

The continued geopolitical tensions due to the War in Ukraine have resulted in Russia and Ukraine not being included as part of the IMD World Competitiveness rankings for the second successive year in 2023. Although it has continued to help South Africa’s World Competitiveness ranking, the War in Ukraine has had an adverse impact on the global economy in the form of high inflation, increasing geopolitical risks as well as an increasingly fragmented world, among other problems.

The scale and duration of these disruptions have affected government policies and business responses as well as adversely affected consumers worldwide.

The geopolitical tensions have undermined the ability of countries to recover from the Covid-19 socio economic disruptions. Dr Caballero added to the Productivity SA Chief Economist ‘s sentiment and said, “ countries that were ranked higher included those who were able to react proactively to the Covid-19 pandemic”. These includes countries like Ireland which remarkably jumped 9 places to move from a ranking of 11th in 2022 to 2nd in 2023.

The IMD WCY evaluates each country’s data based on about 350 distinct criteria, which are grouped into 4 factors, where South Africa performed as follows among the 64 selected countries.

• Economic performance (61st)
• Government efficiency (59th)
• Business efficiency (54th)
• Infrastructure (62nd)

The IMD WCY shows that, in 2023, the following countries topped the global competitiveness rankings.

• Denmark (1st)
• Ireland (2nd)
• Switzerland (3rd)
• Singapore (4th)
• Netherlands (5th)

The IMD WCY further shows that, in 2023, the following countries BRICS countries performed as follows.

• Brazil (60th)
• Russia ( – th )
• India (40th)
• China (21st)
• South Africa (61st)

According to the IMD WCY, the fall in South Africa’s global competitiveness ranking was underpinned by the following challenges.

• High unemployment and economic inequality
• High public debt levels amid a shrinking fiscal space
• Ongoing electricity supply problems and rolling blackouts.
• Lack of decisive plans to address economic structural challenges.
• Deterioration of governance and sustainability of public institutions

Productivity SA Chief Economist, Dr Leroi Raputsoane contends that the ongoing underperformance of South Africa in the World competitiveness rankings is a symptom of the continued inadequacy of the national efforts to address the socio-economic challenges that are faced by the country. The continued inability to reverse the international competitiveness standing of the country undermines the creation of a business-friendly environment and hence exacerbates the legacy changes of high unemployment as well as poverty and income inequality in South Africa.

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