Lifestyle

Nice surprise for South Africa as it climbs important world ranking

Caitlyn Hilliard-Lomas

 ·23 Jun 2026

South Africa has improved its ranking in the 2026 World Competitiveness Yearbook (WCY) published by the Institute of Management Development (IMD) in collaboration with Productivity SA.

The country rose to 54th place out of 70 economies surveyed, up from 64th in 2025. 

According to the IMD World Competitiveness Centre, an economy’s competitiveness cannot be measured solely by its GDP, productivity, or employment levels. 

Instead, it should be evaluated through a complex matrix of political, social, and cultural factors. 

The group said that economic competitiveness is directly correlated with an individual’s quality of life, and that governments play a role as significant as companies.

The IMD World Competitiveness Centre’s report analyses economies from global, regional, sub-regional, and economic viewpoints, while also providing insights into the “people” aspects.

The Department of Employment and Labour said that the improvement indicates progress in several key areas, including government efficiency, business confidence, and infrastructure management. 

However, it also acknowledged significant structural challenges that still hinder the country’s competitiveness and overall economic performance.

The annual rankings, created by the IMD World Competitiveness Centre and coordinated by Productivity SA, assess countries based on four main pillars: Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure.

The Department of Employment and Labour said that South Africa’s improved ranking reflects notable gains in several areas, including government policy adaptability, transparency, urban management, energy infrastructure, public finances, and efforts to reduce bureaucracy and corruption. 

The department said that there have been positive trends in employment growth, exchange rate stability, and health infrastructure.

Productivity SA Chief Economist Lungelo Cele said that the 2026 results indicate improved confidence in various aspects of the policy and institutional environment.

Productivity SA is a government entity tasked with fulfilling an economic and social mandate. Its primary goal is to promote employment growth and productivity, to contribute to South Africa’s socio-economic development and competitiveness.

“Competitiveness is built, not granted, and to grow competitiveness there must be investment in long-cycle assets such as infrastructure and education that compound over years,” said Switzerland‘s Institute of Management Development Senior Economist José Caballero.

Cele also noted that the improvement should be viewed with caution and interpreted in the broader context of ongoing structural economic challenges.

Right direction, but not a comprehensive turnaround

Cele said that while perceptions of the business environment, institutions, and governance have improved, South Africa still faces ongoing challenges. 

He said that the rankings indicate positive momentum in certain areas, but a comprehensive turnaround in competitiveness has yet to occur.

Despite these gains, Cele said that South Africa continues to face serious competitiveness constraints that limit economic growth and investment. 

The report identifies five key challenges for the country:

• Unemployment remains persistently high, with a disconnect between available skills and the needs of the labour market.
• Economic growth is low, and public debt levels are on the rise.
• There are significant infrastructure challenges, especially in energy, water, and logistics.
• Ongoing issues with corruption and crime are negatively impacting service delivery and diminishing investor confidence.
• There is a pressing need to provide stronger support for businesses in high-growth sectors.

The report also emphasises the positive views regarding South Africa’s corporate governance standards, business agility, entrepreneurial culture, and openness to global markets.

Productivity SA pointed out that although the country’s improvement in rankings is promising, continued progress will depend on tackling longstanding structural challenges, particularly in areas such as unemployment, education outcomes, infrastructure reliability, and economic growth.