Banking

Here is one reason to be proud of South Africa

Staff Writer

 ·3 Oct 2016

South Africa is ranked second in the 2016 World Economic Forum Global Competitive Index, when it comes to the soundness of its banking institutions.

It goes one better when it comes to auditing standards, the protection of minority investors and ability to finance through equity markets, out of 138 countries.

It tops 138 countries for auditing standards, the protection of minority investors and ability to finance through equity markets.

Overall, South Africa has risen two places, to 47th, in the 2016  – improving its ranking in 10 of the 12 pillars measured.

South Africa’s financial institutions – the so-called ‘Big Four’ of Standard Bank, FirstRand Bank, Nedbank, and Absa – were praised for successfully weathering the global financial crisis in 2008 through prudent lending mechanisms.

And it appears that the country’s citizens still have trust in their financial institutions.

WEF used its executive opinion survey to ask ‘in your country, how do you assess the soundness of banks?’

• 1 = extremely low—banks may require recapitalization
• 7 = extremely high—banks are generally healthy with sound balance sheets

Top 10 countries with the most sound financial institutions

The improvement in the rankings, the best in five years, comes as the country has improved both the competitiveness of our markets and relationships between labour and business, made modest, but important, progress in the quality of education, which is up five places from 2015.

One reason for South Africa’s rise in the annual appraisal of prosperity and productivity is, according to the report, our ability to withstand the fall in price of commodities.

Unlike African neighbours and other developing economies, South Africa has also built on the strength of its financial sector, which shielded the country from the worst effects of the global economic crisis.

The country has the most competitive economy on the African continent.

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