How the world rates South Africa
Anne Taylor
South Africa's ranking in some of the major international indices took a knock from the 2008/09 global financial crisis. In most cases, however, the country held firm, notably in the World Economic Forum's Global Competitiveness Index, while in others, such as the Gender Gap Index, it made significant progress.
The interdependence of the world's economies meant that no country escaped the effects of the global crisis. In 2009, South Africa experienced a dramatic slowdown in economic growth.
Despite the uncertainty, however, international analysts generally believe that some African countries, including South Africa, are well placed to bounce back from the crisis. South Africa has a large economy and is widely recognised as having solid fundamentals and sound and effective financial systems.
And, as the International Monetary Fund (IMF) reported in January 2010, there is good news ahead: signs of recovery in GDP are already appearing.
"Industrial production began to pick up in South Africa in the third quarter of 2009," the IMF reports. "Throughout the region, exports have been rising strongly since the second quarter of 2009, reversing much of the hemorrhaging that began in the third quarter of 2008."
In fact, in its October 2009 World Economic Outlook, the IMF looked for GDP growth in sub-Saharan Africa of about 4 percent in 2010.
What follows is a round-up of the major international surveys, with a special focus on South Africa's performance.
- Global Competitiveness Index
- Africa competitiveness
- Ease of doing business
- Economic freedom
- Top 40 companies
- Emerging markets
- IT industry competitiveness index
- Corruption perceptions Index
- Failed states index
- Press freedom
- Global gender index
- Expat experience
- Cost of living survey
Global Competitiveness Index
Source: World Economic Forum
Latest publication date: September 2009
South Africa's ranking: 45 out of 133 countries
Despite a year of global uncertainty in 2009, South Africa's stable performance sees it hold on to its position as the 45th most competitive country in the 2009/10 World Economic Forum's Global Competitiveness Index, making it the highest ranked country in sub-Saharan Africa.
The country's reporting and auditing systems are the second best in the world, with only Hong Kong scoring higher.
Up from fourth position last year, South Africa's standing is also underlined by its "notable" achievement of maintaining trust in its markets despite worldwide jitters, with strong confidence in South Africa's financial markets pushing the country to a "very high" fifth position, up from 24th in 2008.
South Africa also scores well in more complex areas such as business sophistication (36th) and innovation (41st), benefiting from good scientific research institutions (ranked 29th) and strong collaboration between universities and the business sector in innovation (ranked 25th).
Conducted by the World Economic Forum (WEF) in partnership with leading academics and a global network of research institutes, the index calculates its rankings from publicly available data and a poll of more than 13 000 business leaders in 133 economies. The main goal of the report is to evaluate countries' economic environment and their ability to achieve sustained levels of prosperity and growth.
The index is based on 12 "pillars of competitiveness": institutions; infrastructure; macroeconomic stability; health and primary education; higher education and training; goods market efficiency; labour market efficiency; financial market sophistication; technological readiness; market size; business sophistication; and innovation.
South Africa, says the WEF, has continued to benefit from the large size of its economy, particularly by regional standards – it is ranked 24th in the market size pillar.
South Africa also ranks strongly on measures of the quality of institutions and factor allocation, such as intellectual property protection (24th), the accountability of private institutions (5th), and goods market efficiency (35th).
At the same time, the WEF says, South Africa would do well to address "enduring weaknesses", mainly around labour-related issues, such as an uneducated workforce (the university enrolment rate is at 15 percent), labour market efficiency (ranked 90th), poor labour-employer relations (ranked 121st), and the health of the workforce (ranked 127th).
Perhaps the biggest barrier to South Africa's competitiveness are perceptions around the business costs of crime and violence, which sees South Africa pushed into last position at 133.
The ongoing improvements to the country's transport infrastructure for the 2010 World Cup should help improve its infrastructure ranking from 45th. Although described as good by regional standards, upgrading will reinforce South Africa's competitiveness.
- Get the full report here (PDF, 3.85MB)
Africa competitiveness report
Source: World Economic Forum
Latest publication date: June 2009
South Africa's ranking: 2 out of 31 African countries
South Africa has been rated as one of the continent's top innovators, according to the Africa Competitiveness Report, which reviews the degree of competitiveness of Africa's economies.
Rated as being on a par with innovative countries such as India and Brazil, South Africa is credited as having high-quality scientific research institutions, strong investment in research and development, and a significant level of collaboration between business and universities in research.
With a score of 4.4 out of 7, South Africa comes in second, after Tunisia (4.4), the top ranked African country. Botswana (4.2), Mauritius (4.2), Morocco (4.1), Namibia (4.0), Egypt (4.0), the Gambia (3.9), Kenya (3.8) and Nigeria (3.8) complete the top 10.
Based on data collected by the Global Competitiveness Survey, the African Competitiveness Report is compiled by economic and financial specialists from the WEF, the World Bank and the Africa Development Bank.
A total of 133 countries – including 31 African countries – are assessed and scored according to the 12 pillars of competitiveness used in the Global Competitiveness survey (outlined above). The weight of these measures varies according to the individual state's stage of development.
Doing Business report
Source: World Bank and International Finance Corporation
Latest publication date: September 2009
South Africa's ranking: 34 out of 183 countries
South Africa ranks 34th in the World Bank and International Finance Corporation's "Doing Business 2010: Reforming Through Difficult Times", an annual survey of the time, cost and hassle involving in doing business in 183 economies around the world. The country was placed 32nd in the previous survey.
In the year under review, South Africa was credited for lowering taxes on domestic firms and was a strong performer when it comes to getting credit (second overall), protecting investors (10th overall) and payment of taxes (23rd).
Its weaknesses remain ease of employing workers (102nd) and trading across borders (148th).
The Doing Business survey analyses regulations that apply to an economy's businesses during their life cycles, including start-up and operations, trading across borders, paying taxes, and closing a business. It does not, however, measure variables such as security, macroeconomic stability, corruption, skill level, or the strength of financial systems.
Despite the challenges of the global economic crisis, it was a year of record-setting and fast-paced reform. According to the report, 287 reforms were recorded in 131 economies in the year under review, a jump of 20 percent.
According to the World Bank, most of the action occurred in developing countries, with two-thirds of the reforms in low to low-to-middle-income economies. Reformers focused on making it easier to start and operate a business, strengthening property rights and improving the efficiency of commercial dispute resolution and bankruptcy procedures.
Sub-Saharan Africa recorded 67 regulatory reforms in 29 of 46 countries. And, for the first time, a Sub-Saharan African country – Rwanda – was named as the world's top reformer.
Mauritius was the continent's top performer for a second year in a row, moving into the top 20 countries at position 17. South Africa the second most business-friendly African country at 34, followed by Botswana at 45, Namibia at 66 and Rwanda at 67.
Singapore maintained its position as the overall top-ranked economy for the fourth year running, with New Zealand, Hong Kong, the US, the United Kingdom completing the top five.
- Doing Business 2009: Full South Africa report
Economic freedom
Source: The Heritage Foundation
Latest publication date: January 2009
South Africa's ranking: 61 out of 179 countries
South Africa's advanced financial systems helped improve the country's rating in the annual Index of Economic Freedom, where it was graded the 61st freest economy of 179 countries.
The index, published by The Wall Street Journal and US think tank the Heritage Foundation, uses 10 benchmarks to measure the economic success of 179 countries. The 10 freedoms measured are: business freedom, trade freedom, fiscal freedom, government size, monetary freedom, investment freedom, financial freedom, property rights, freedom from corruption, and labour freedom.
South Africa's economic freedom score is 63.8, 0.4 point better than 2008, reflecting improvements in four of the 10 economic freedoms. South Africa is ranked third out of 46 countries in the Sub-Saharan Africa region, and its overall score is higher than the world average.
South Africa scored above the world average in eight economic freedoms: business freedom (74.6 ), trade freedom (74.8), government size (77.6), monetary freedom (74.3), investment freedom (50), Financial freedom (60), property rights (50), freedom from corruption (51).
In its report on South Africa, the Heritage Foundation writes: "Only eight enterprises remain state-owned, and government expenditure equals less than 30 percent of GDP. Monetary stability is relatively sound, but the government controls the prices of a few commodities. The financial system is one of the most developed in Africa and continues to grow."
South Africa, however, scores below the world average in fiscal freedom. Although the judicial system is slow, and race laws and unclear regulations hamper foreign investment, the legal environment is free from political interference and the threat of expropriation. Corruption, the report notes, is low compared to other countries in the region.
Worldwide, the level of economic freedom in the world has continued to grow over the past year, with 83 economies representing every region posting gains, the foundation notes.
Gains were recorded in 22 sub-Saharan economies. Despite the region being "characterised by poverty and instability", it has made some significant progress in the past year, resulting in an overall increase in economic freedom.
Mauritius held on to its spot in the top 20 at rank 18th, while Botswana (34), South Africa, Uganda (63) and Namibia (71) make up rest of the region's top five.
Zimbabwe posted the biggest drop. New restrictions on business freedom and fiscal freedom, along with the world's worst hyper-inflation, caused that economy's score to drop by 6.7 points, to next-to-last place in the rankings.
The five freest economies in the world are Hong Kong, Singapore, Ireland, Australia and New Zealand. North Korea is the least free economy, at position 179.
Top 40 companies
Source: BusinessWeek
Latest publication date: October 2009
South Africa's ranking: 43 out of 66 countries
Three South African companies have been recognised as the best in the world in a survey of the world's top 40 firms.
South African companies MTN, the mobile telecommunications company, Sasol, the energy and chemicals specialist, and Bidvest, the global services, trading and distribution group, are included in BusinessWeek's list of the World’s Top 40 Companies.
Traits common to the world's best, says BusinessWeek, are a commitment to innovation, diversified portfolios, aggressive expansion, strong leadership, and a clear vision for the future.
The top-40 survey, released on 1 October 2009, was compiled by management consulting firm AT Kearney for the magazine. The top companies were chosen from the 2 500 biggest publicly listed companies in 18 countries. To qualify, companies had to generate at least US$10-billion (about R74-billion) in sales in 2008, of which at least 25 percent had to be derived from outside their base country. Companies were also judged on their five-year track record for sales growth and value creation.
Nintendo, the Japan-based electronics company, tops the list while Google, the US internet search engine leader, Apple, the US electronics and computer software firm, came second and third respectively.
MTN was seventh on the list, ahead of the world's biggest mining company, BHP Billiton, which secured 10th place. Although it's an Australian firm, the latter has a strong presence in South Africa.
Sasol, a multinational which produces a wide variety of chemical and liquid fuels, was 24th on the list. The company mines coal in South Africa and produces gas in Mozambique and oil in Gabon. It also has chemical manufacturing and marketing operations across the globe.
Bidvest, which employs more than 105 000 people in South Africa, made it to number 37. The survey identifies Bidvest is an example of an emerging-market company poised to become a global player.
Emerging markets
Source: Economist Intelligence Unit for UK Trade and
Investment
Latest publication date: October 2009
South Africa's ranking: 4 out of 66 countries
South Africa has been identified as a key emerging market for global investors, moving up to fourth from eighth position in a survey conducted by the Economist Intelligence Unit for UK Trade and Investment, the British government’s international business development agency.
The report, based on a survey of more than 540 companies across 19 business sectors, found that emerging market economies, on the back of the continued high growth and market size of China and India, had outperformed those of developed countries in 2009.
In the equivalent report by the Economist Intelligence Unit in 2008, South Africa was ranked eighth in a top 10 list of "new wave" investment markets.
The latest report found 60 percent of companies surveyed expected to derive more than 20 percent of their total revenues from emerging markets in five years' time – almost double the current figure of 31 percent.
According to the report, political risk (including the risk of nationalisation and expropriation) was cited by 50 percent of survey respondents as the greatest government-related obstacle to doing business in emerging markets.
The "Survive and Prosper: emerging markets in the global recession" report highlights the opportunities and longer-term strategic importance offered by emerging economies.
"The global recession was a wake-up call for companies to diversify their export base and seek out new opportunities in the emerging world," UK Secretary State Lord Mandelson said at the report’s launch. "We are encouraging UK business to look abroad and find new business in these exciting new markets."
- Download the report findings
IT industry competitiveness
index
Source: Economist Intelligence Unit
Latest publication date: September 2009
South Africa's ranking: 43 out of 66 countries
South Africa ranks 43rd out of 66 countries measured in the 2009 IT industry competitiveness index, with a score of 35.3 out of a possible 100.
The survey, now in its third year, ranks the information technology (IT) industry environments of 66 countries on the extent to which they enable a competitive IT sector. The survey is compiled by the Economist Intelligence Unit, the business information arm of The Economist Group, publisher of The Economist.
Titled "Resilience Among Turmoil: Benchmarking IT Industy Competitiveness", the report notes that the IT sector has ridden out the crisis reasonably well, despite reduced technology spending. It highlights the concern that "protectionist instincts are on the rise in many governments' technology sector policies".
South Africa's shift from 37 in 2008 to 43 in 2009 can be contributed to changes in the country's performance as well as to improvements in the sources of data used to measure some indicators, the report says.
According to the EIU, six factors work together to create a sound environment for the IT sector: an ample supply of skilled workers; an innovation-friendly culture; world-class technology infrastructure; a robust legal regime that protects intellectual property; a stable, open, and competitive economy; and government leadership that strikes the right balance between promoting technology and allowing market forces to work.
According to the study, South Africa performs best in the areas associated with the business environment, scoring 74.9 out of a possible 100, and the legal environment (63.5). The country also fares relatively well for its support for IT industry development, with a score of 55.
However, South Africa's IT infrastructure, with a low score of 17.8, is identified as the key area in need of improvement, primarily through the provision of high-quality networks and greater liberalisation of telecommunications. The R&D environment, scoring a mere 13.2, and human capital at 31.8, are other areas earmarked for improvement.
"In today's economic climate, supporting a strong technology sector is more important than ever," said Alastair de Wet, chairperson of the South African chapter of the Business Software Alliance, sponsor of the survey. "Technology can drive the economic recovery and generate long-term economic growth. Broadband availability is becoming increasingly essential to IT-sector competitiveness, as more IT offerings are delivered over the internet."
He said the recent construction of the Seacom cable and the premise of increased and cheaper broadband could influence the South African rank positively in the next few years.
The overall top countries in the survey are the United States, with an overall score of 78.9, Finland (73.6), Sweden (71.5), Canada (71.3), the Netherlands (70.7), the United Kingdom (70.2), Australia (68.7), Denmark (68.6), Singapore (68.3) and Norway (67.1).
The top five countries in the Middle East-Africa region are Israel (64.3), South Africa (35.3), Saudi Arabia (33.9), Turkey (33.8) and Egypt (26.8). Algeria (19.8) and Nigeria (18.8) are the only two other African countries in the ranking, in position 64 and 65 respectively.
- Get the full report here
Corruption Perceptions Index
Source: Transparency International
Latest publication date: November 2009
South Africa's ranking: 55 out of 180 countries
South Africa is ranked 55th out of 180 countries on Transparency International's 2009 Corruption Perceptions Index.
The Corruption Perceptions Index (CPI) measures the perceived level of public-sector corruption in 180 countries and territories. The CPI is a "survey of surveys", based on 13 different expert and business surveys. Countries are ranked on a scale of zero (perceived to be highly corrupt) to 10 (perceived as having low levels of corruption).
South Africa scored 4.7 and slipped one place from 54 in 2008. The report reinforces Harvard University's index of African governance, released in December 2009, in which SA's ratings slipped two places to ninth position in Africa due to declining levels of safety and security, political rights and rule of law.
Botswana is the top-ranked African state at position 37, followed by Mauritius at 42, Cape Verde at 46 and Seychelles at 54.
New Zealand has unseated Denmark as the world's least corrupt nation in 2009 with a score of 9.4 . Denmark, at second place, scores 9.3, followed by Singapore and Sweden, tied at 9.2, and Switzerland at 9. Fragile, unstable states linger at the bottom of the rankings: Somalia, with a score of 1.1, Afghanistan (1.3), Myanmar (1.4), and Sudan, which is tied with Iraq on 1.5.
Failed States Index
Source: Fund for Peace, Foreign Policy magazine
Latest publication date: August 2009
South Africa's ranking: 55th strongest out of 177 countries
At position 122, the South African state is regarded as the 55th least likely country to fail, according to US think tank Fund for Peace and magazine Foreign Policy's Failed States Index for 2009, which evaluates 177 countries.
Fund for Peace analyses and reviews hundreds of thousands of articles from global and regional sources to compile its index of countries at risk of failure.
Social, economic and political indicators are taken into account, with criteria of risk ranging from "progressive deterioration of public services" to "intervention of other states or external political actors".
South Africa ranks as the third strongest African country, after Mauritius at 29 and Ghana at 53. Tunisia is 56, the Seychelles at 57 and Botswana at 61. Norway, Finland, Sweden Switzerland and Ireland top the list, while Somalia, Zimbabwe, Sudan, Chad and the Democratic Republic of Congo (DRC) rank as the world's most fragile states.
Press freedom
Source: Reporters Without Borders
Latest publication date: October 2009
South
Africa's ranking: 33 out of 175 countries
South Africa moved up to claim 33 in the Reporters Without Borders Press Freedom Index for 2009, coming in ahead of countries such as the US (37), USA (37), Argentina (68), Brazil (82), Russia (141), and China (167).
South Africa has been rising steadily in the Index since 2006, when the country was placed at 44. In 2008, South Africa was in 36th position.
The young African democracies of South Africa, Ghana and Mali all moved up impressively in the rankings, replacing European countries France (43rd), Slovakia (44th) and Italy (49th), which all "fell significantly". Boosted by its democratic election, Ghana is the top African country at 27. Mali ties with Portugal and Costa Rica at 30, while Namibia (35th) and Cape Verde (44th) are the other African countries in the top 50.
This is the eighth annual world press freedom index of 175 countries, compiled from questionnaires completed by hundreds of journalists and media experts around the world. Press freedom is seen as an important tool to inform, expose corruption and abuse of power in governments and to give a voice to minorities and groups facing neglect or discrimination.
Denmark, Finland, Ireland, Norway and Sweden were tied in first place. In last place, at 175th, is Eritrea, where no independent media is tolerated and as many as 30 journalists are in prison.
Global Gender Gap Index
Source: World Economic Forum
Latest publication date: October 2009
South Africa's ranking: 6 out of 134 countries
South Africa has made "great strides" in narrowing its gender gaps and enters the top 10 of the Global Gender Gap Index at sixth spot. The country was ranked at 22 in 2008.
The index, released by the World Economic Forum, ranks countries according to how much they have reduced gender disparities based on economic participation, education, health and political empowerment, while attempting to strip out the effects of a country's overall wealth.
The latest data, the report notes, reveal that South Africa has made significant improvements in female labour force participation in addition to gains for women in parliament and in ministerial positions in the new government.
The Global Gender Gap Reports aim to quantify the size of gender-based disparities, tracking their progress over time.
"Of the 115 countries covered in the report since 2006, more than two-thirds have posted gains in overall index scores, indicating that the world in general has made progress towards equality," Ricardo Hausmann, one of the authors of the report, said in a statement.
Lesotho slides in at 10, the only other African country in the top 20, recognised has having no gap in education and health. Mozambique (26), Namibia (32) and Botswana (39) complete Africa's top five.
Iceland, Finland, Norway, Sweden and New Zealand make up the global top five. The US is ranked at 31. Iran (128), Turkey (129), Pakistan (132) and Yemen (134), already at the bottom of the rankings, displayed an absolute decline relative to their performance in 2008.
- Read more about the Gender Gap Index
- Download the full report here
Expat experience
Source: HSBC Bank International
Latest publication date: November 2009
South Africa's ranking: 6th best out of 26 countries
South Africa is one of the best countries in the world to live in, according to a global survey of more than 3 100 expatriates in 50 different countries.
Commissioned by HSBC Bank International, the Expat Experience survey explores the experiences and perceptions of expats while they work abroad. South Africa was rated as the sixth best country out of 26 to live in, coming in behind Canada, Australia, Thailand, Singapore and Bahrain.
Expats rated their current locations according to 23 day-to-day criteria, including accommodation, food, social life, healthcare, working hours and family life.
South Africa was the top-ranked country for hobbyists, as well as the top country for settling down, beating Thailand and Canada, which took second and third place respectively. More than half of those questioned – 55 percent – have lived in South Africa for more than five years.
South Africa was rated among the top nations in terms of the ease with which expats integrated into local society, which included lifestyle factors such as setting up bank accounts, learning the language, and arranging healthcare.
In addition to making the top 10 overall, South Africa scored highly in the categories of making local friends (2), organising schools (3), finding somewhere to live (3), social life (3), quality of life (3), and accommodation (4). South Africa's worst score was 22 out of 26, in the transport category.
According to the report, in most countries new arrivals gravitate towards the expat community when seeking new friends. Notable exceptions are Brazil, where 94 percent of people easily made local friends; followed by South Africa and Canada (both 91 percent); and India and Russia (both 90 percent).
- Read the full Expat Experience report
Cost of living
Source: HSBC Bank International
Latest publication date: July 2009
South Africa's ranking: Johannesburg rated cheapest out of 143
cities
Johannesburg has been rated as the most affordable city in the world for foreigners in the Worldwide Cost of Living survey, regarded as the world's most comprehensive study of this type.
Out of 143 cities on six continents, Johannesburg was found to be the cheapest, almost three times cheaper than the most expensive city, Tokyo.
Mercer's survey measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
The weakening of South Africa's currency, the rand, against the dollar is said to be responsible for Johannesburg replacing Asunción in Paraguay as the least expensive location in 2009.
The highest ranking – or most expensive – African city is Douala, Cameroon (27), while Lagos (32) is the second most expensive African city.
- Read more about the survey here
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