South Africa remains the most competitive economy in sub-Saharan Africa, according to the World Economic Forum's Global Competitiveness Report 2012/13 released on Wednesday.
"South Africa is ranked 52nd this year, remaining the highest-ranked country in sub-Saharan Africa and the third-placed among the BRICS economies," the WEF said in a statement. South Africa ranked 50th in the 2011/12 report.
The country benefits from the large size of its economy, particularly by regional standards, the WEF said. It ranks 25th out of 144 economies in the world in terms of market size.
"Particularly impressive is the country's financial market development (3rd), 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," the WEF said.
South Africa did well on measures of the quality of its institutions and on intellectual property protection (ranking 20th), property rights (26th), the accountability of its private institutions (2nd), and its goods market efficiency (32nd).
South Africa does "reasonably well in more complex areas" such as business sophistication (38th) and innovation (42nd), benefiting from good scientific research institutions (34th) and strong collaboration between universities and the business sector in innovation (30th).
"These combined attributes make South Africa the most competitive economy in the region."
The WEF said to improve its competitiveness, South Africa needed to address some weaknesses.
"South Africa ranks 113th in labour market efficiency (a drop of 18 places from last year), with rigid hiring and firing practices (143rd), a lack of flexibility in wage determination by companies (140th), and significant tensions in labour-employer relations (144th)."
The country also needed to increase its university enrolment rate to better develop its innovation potential. "Combined efforts in these areas will be critical in view of the country's high unemployment rate of almost 25% in the second quarter of 2012."
Although South Africa's infrastructure was good by regional standards, it needed upgrading (63rd).
The WEF pointed out that the poor security situation remains another important obstacle to doing business in South Africa. "The high business costs of crime and violence (134th) and the sense that the police are unable to provide sufficient protection from crime (90th) do not contribute to an environment that fosters competitiveness."
The health of the workforce, ranked 132nd out of 144 economies, was concerning.
Switzerland tops the overall rankings, with Singapore second, and Finland in third position. They are followed by Sweden, Netherlands, Germany, the United States, the United Kingdom, Hong Kong and Japan in the top 10.
Among the BRICS, the People's Republic of China (29th) continues to lead the group. Brazil is ranked 48th, South Africa 52nd, India 59th and Russia 67th.
SA - the Good News via SAPA, Wednesday, 05 September 2012