Extract from World Economic Forum, The Global Competitiveness Report 2011-2012: Country Profile Highlights, September 7 2011
Sub-Saharan Africa has grown impressively over the last 15 years. It has bounced back rapidly from the global economic crisis, and its growth rates continue to exceed the global average. Indeed, some African countries improve with respect to national competitiveness this year. South Africa and Mauritius remain in the top half of the rankings, having advanced since last year. There have also been measurable improvements across specific areas in a number of other African countries. On the other hand, some significant declines have registered in countries that were previously striding ahead. More generally, subSaharan Africa as a whole lags behind the rest of the world in competitiveness, requiring efforts across many areas to place the region on a firmly sustainable growth and development path going forward.
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 economies. The country benefits from the large size of its economy, particularly by regional standards (it is ranked 25th in the market size pillar). 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).
Particularly impressive is the country's financial market development (4th), indicating 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).
These combined attributes make South Africa the most competitive economy in the region. However, in order to further enhance its competitiveness the country will need to address some weaknesses. South Africa ranks 95th in labor market efficiency, with rigid hiring and firing practices (139th), a lack of flexibility in wage determination by companies (138th), and significant tensions in labor-employer relations (138th).
Efforts must also be made to increase the university enrollment rate of only 15 percent, which places the country 97th overall, in order to better develop its innovation potential. In addition, South Africa's infrastructure, although good by regional standards, requires upgrading (62nd). 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. Another major concern remains the health of the workforce, which is ranked 129th out of 142 economies-the result of high rates of communicable diseases and poor health indicators more generally.
Full breakdown of South Africa's rank and scoring on different components of competitiveness index:
|
Index |
Rank |
Score |
|
GCI Global Competitiveness Index 2011-2012 |
50 |
4.34 |
|
A Basic requirements SubIndex |
85 |
4.32 |
|
A.01 1st pillar: Institutions |
46 |
4.36 |
|
A.01.01 A. Public institutions |
52 |
4.09 |
|
A.01.01.01 1. Property rights |
27 |
5.18 |
|
1.01 Property rights |
30 |
5.29 |
|
1.02 Intellectual property protection |
30 |
4.97 |
|
A.01.01.02 2. Ethics and corruption |
66 |
3.33 |
|
1.03 Diversion of public funds |
81 |
2.95 |
|
1.04 Public trust of politicians |
88 |
2.40 |
|
1.05 Irregular payments and bribes |
48 |
4.64 |
|
A.01.01.03 3. Undue influence |
52 |
3.73 |
|
1.06 Judicial independence |
35 |
4.97 |
|
1.07 Favoritism in decisions of government officials |
114 |
2.48 |
|
A.01.01.04 4. Government inefficiency |
38 |
4.10 |
|
1.08 Wastefulness of government spending |
69 |
3.18 |
|
1.09 Burden of government regulation |
112 |
2.73 |
|
1.1 Efficiency of legal framework in settling disputes |
16 |
5.03 |
|
1.11 Efficiency of legal framework in challenging regs |
19 |
4.72 |
|
1.12 Transparency of government policymaking |
34 |
4.84 |
|
A.01.01.05 5. Security |
110 |
4.10 |
|
1.13 Business costs of terrorism |
33 |
6.11 |
|
1.15 Organized crime |
112 |
4.16 |
|
1.16 Reliability of police services |
95 |
3.63 |
|
A.01.02 B. Private institutions |
27 |
5.17 |
|
A.01.02.01 1. Corporate ethics |
51 |
4.36 |
|
1.17 Ethical behavior of firms |
51 |
4.36 |
|
A.01.02.02 2. Accountability |
3 |
5.98 |
|
1.18 Strength of auditing and reporting standards |
1 |
6.49 |
|
1.19 Efficacy of corporate boards |
2 |
5.80 |
|
1.2 Protection of minority shareholders' interests |
3 |
5.84 |
|
1.21 Strength of investor protection, 0-10 (best)* |
10 |
8.00 |
|
A.02 2nd pillar: Infrastructure |
62 |
4.02 |
|
A.02.01 A. Transport infrastructure |
33 |
4.59 |
|
2.01 Quality of overall infrastructure |
60 |
4.51 |
|
2.02 Quality of roads |
43 |
4.76 |
|
2.03 Quality of railroad infrastructure |
46 |
3.36 |
|
2.04 Quality of port infrastructure |
50 |
4.70 |
|
2.05 Quality of air transport infrastructure |
17 |
6.14 |
|
2.06 Available airline seat kilometers per week, millions* |
24 |
1,152.64 |
|
A.02.02 B. Electricity and telephony infrastructure |
97 |
3.45 |
|
2.07 Quality of electricity supply |
97 |
3.72 |
|
2.08 Fixed telephone lines/100 pop.* |
100 |
8.43 |
|
2.09 Mobile telephone subscriptions/100 pop.* |
71 |
100.48 |
|
A.03 3rd pillar: Macroeconomic environment |
55 |
4.96 |
|
3.01 Government budget balance, % GDP* |
104 |
-5.71 |
|
3.02 National savings rate, % GDP* |
72 |
19.96 |
|
3.04 Interest rate spread, %* |
36 |
3.37 |
|
3.05 General government debt, % GDP* |
54 |
35.74 |
|
3.06 Country credit rating, 0-100 (best)* |
48 |
63.30 |
|
A.04 4th pillar: Health and primary education |
131 |
3.96 |
|
A.04.01 A. Health |
129 |
4.14 |
|
4.01 Business impact of malaria |
103 |
5.00 |
|
4.02 Malaria cases/100,000 pop.* |
90 |
67.37 |
|
4.03 Business impact of tuberculosis |
135 |
3.44 |
|
4.04 Tuberculosis incidence/100,000 pop.* |
141 |
971.00 |
|
4.05 Business impact of HIV/AIDS |
132 |
3.01 |
|
4.06 HIV prevalence, % adult pop.* |
139 |
17.80 |
|
4.07 Infant mortality, deaths/1,000 live births* |
111 |
43.10 |
|
4.08 Life expectancy, years* |
130 |
51.62 |
|
A.04.02 B. Primary education |
125 |
3.78 |
|
4.09 Quality of primary education |
127 |
2.40 |
|
4.1 Primary education enrollment, net %* |
118 |
84.65 |
|
B Efficiency enhancers SubIndex |
38 |
4.44 |
|
B.05 5th pillar: Higher education and training |
73 |
4.03 |
|
B.05.01 A. Quantity of education |
84 |
4.24 |
|
5.01 Secondary education enrollment, gross %* |
51 |
93.87 |
|
5.02 Tertiary education enrollment, gross %* |
97 |
15.41 |
|
B.05.02 B. Quality of education |
112 |
3.30 |
|
5.03 Quality of the educational system |
133 |
2.33 |
|
5.04 Quality of math and science education |
138 |
2.08 |
|
5.05 Quality of management schools |
13 |
5.43 |
|
5.06 Internet access in schools |
100 |
3.37 |
|
B.05.03 C. On-the-job training |
35 |
4.55 |
|
5.07 Availability of research and training services |
47 |
4.44 |
|
5.08 Extent of staff training |
27 |
4.65 |
|
B.06 6th pillar: Goods market efficiency |
32 |
4.66 |
|
B.06.01 A. Competition |
28 |
4.80 |
|
B.06.01.01 1. Domestic competition |
22 |
4.81 |
|
6.01 Intensity of local competition |
49 |
5.15 |
|
6.02 Extent of market dominance |
37 |
4.29 |
|
6.03 Effectiveness of anti-monopoly policy |
7 |
5.33 |
|
6.04 Extent and effect of taxation |
28 |
4.06 |
|
6.06 No. procedures to start a business* |
34 |
6.00 |
|
6.07 No. days to start a business* |
84 |
22.00 |
|
6.08 Agricultural policy costs |
37 |
4.23 |
|
6.05 Total tax rate, % profits* |
36 |
30.50 |
|
B.06.01.02 2. Foreign competition |
62 |
4.72 |
|
6.09 Prevalence of trade barriers |
51 |
4.68 |
|
6.11 Prevalence of foreign ownership |
34 |
5.23 |
|
6.12 Business impact of rules on FDI |
55 |
4.85 |
|
6.13 Burden of customs procedures |
62 |
4.23 |
|
6.14 Imports as a percentage of GDP* |
108 |
31.36 |
|
6.1 Trade tariffs, % duty* |
72 |
5.92 |
|
B.06.02 B. Quality of demand conditions |
41 |
4.38 |
|
6.15 Degree of customer orientation |
67 |
4.64 |
|
6.16 Buyer sophistication |
31 |
4.13 |
|
B.07 7th pillar: Labor market efficiency |
95 |
4.06 |
|
B.07.01 A. Flexibility |
119 |
3.94 |
|
7.01 Cooperation in labor-employer relations |
138 |
3.28 |
|
7.02 Flexibility of wage determination |
138 |
3.04 |
|
7.05 Redundancy costs, weeks of salary* |
46 |
24.00 |
|
7.03 Rigidity of employment index, 0-100 (worst)* |
90 |
35.00 |
|
B.07.02 B. Efficient use of talent |
63 |
4.18 |
|
7.06 Pay and productivity |
130 |
2.98 |
|
7.07 Reliance on professional management |
18 |
5.49 |
|
7.08 Brain drain |
48 |
3.80 |
|
7.09 Women in labor force, ratio to men* |
76 |
0.76 |
|
B.08 8th pillar: Financial market development |
4 |
5.48 |
|
B.08.01 A. Efficiency |
23 |
4.51 |
|
8.01 Availability of financial services |
3 |
6.33 |
|
8.02 Affordability of financial services |
39 |
4.87 |
|
8.03 Financing through local equity market |
4 |
5.13 |
|
8.04 Ease of access to loans |
36 |
3.26 |
|
8.05 Venture capital availability |
44 |
2.93 |
|
B.08.02 B. Trustworthiness and confidence |
2 |
6.46 |
|
8.06 Soundness of banks |
2 |
6.62 |
|
8.07 Regulation of securities exchanges |
1 |
6.36 |
|
8.08 Legal rights index, 0-10 (best)* |
8 |
9.00 |
|
B.09 9th pillar: Technological readiness |
76 |
3.60 |
|
B.09.01 A. Technological adoption |
37 |
5.39 |
|
9.01 Availability of latest technologies |
39 |
5.69 |
|
9.02 Firm-level technology absorption |
30 |
5.54 |
|
9.03 FDI and technology transfer |
41 |
4.96 |
|
B.09.02 B. ICT use |
102 |
1.80 |
|
9.04 Internet users/100 pop.* |
105 |
12.30 |
|
9.05 Broadband Internet subscriptions/100 pop.* |
96 |
1.48 |
|
9.06 Internet bandwidth, kb/s/capita* |
112 |
0.21 |
|
9.07 Household with a computer, % |
86 |
18.33 |
|
B.10 10th pillar: Market size |
25 |
4.81 |
|
B.10.01 A. Domestic market size |
24 |
4.71 |
|
10.03 GDP (PPP)* |
25 |
523.95 |
|
10.04 Exports as a percentage of GDP* |
97 |
26.85 |
|
10.01 Domestic market size index, 1-7 (best)* |
24 |
4.71 |
|
B.10.02 B. Foreign market size |
38 |
5.12 |
|
10.02 Foreign market size index, 1-7 (best)* |
38 |
5.12 |
|
C Innovation and sophistication factors SubIndex |
39 |
3.93 |
|
C.11 11th pillar: Business sophistication |
38 |
4.32 |
|
11.01 Local supplier quantity |
47 |
4.99 |
|
11.02 Local supplier quality |
31 |
5.16 |
|
11.03 State of cluster development |
46 |
3.92 |
|
11.04 Nature of competitive advantage |
97 |
3.01 |
|
11.05 Value chain breadth |
100 |
3.11 |
|
11.06 Control of international distribution |
26 |
4.61 |
|
11.07 Production process sophistication |
41 |
4.32 |
|
11.08 Extent of marketing |
31 |
4.94 |
|
11.09 Willingness to delegate authority |
32 |
4.27 |
|
C.12 12th pillar: Innovation |
41 |
3.53 |
|
12.01 Capacity for innovation |
46 |
3.38 |
|
12.02 Quality of scientific research institutions |
30 |
4.67 |
|
12.03 Company spending on R&D |
36 |
3.56 |
|
12.04 University-industry collaboration in R&D |
26 |
4.62 |
|
12.05 Gov't procurement of advanced tech products |
103 |
3.26 |
|
12.06 Availability of scientists and engineers |
111 |
3.40 |
|
12.07 Utility patents granted/million pop.* |
42 |
2.30 |
|
136 |
2.51 |
* Denotes hard data
Source: World Economic Forum, September 7 2011
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