SOUTH Africa remains the most competitive economy in sub-Saharan Africa, according to the World Economic Forum's Global Competitiveness Report 2012-13. third among the Brics economies," the WEF said.
Brics refers to the Brazil, Russia, India, China and South Africa group of large emerging market economies. 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 its 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, 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).
But it needed to address weaknesses. "South Africa ranks 113th in labour market efficiency [a drop of 18 places], 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 and address the cost of protection against crime. – Sapa