The latest world competitiveness report by the World Economic Forum shows that South Africa ranks as having some of the safest financial institutions in the world – but some of the world’s worst quality education.
The report looks at a wide array of indicators, covering various aspects to measure how competitive a country is in the global marketplace.
The rankings on each section is based on an executive survey, gauging how business leaders and executives across the world perceive the overall competitiveness in 138 countries.
Among sections such as politics, education, economics, corruption and safety, financial security is also assessed.
South Africa has an overall competitiveness ranking of 47th out of 138 (up two places from 2015) – but ranks most favourably in its financial institutions, where it carries the perception of having some of the world’s ‘safest’ banks.
South Africa ranks top in the world for the extent that companies raise money by issuing shares and/or bonds on the capital market, while ranking second for the healthy balance sheets – security – of its banking sector.
The measure isn’t based on factual assessment or account principles, but is rather a reflection of the general perception around banks. What the data shows is that businesses have a lot of trust and confidence in South Africa’s banks.
These are the countries in the world with the safest banking industries:
|#||Country||Score (out of 7)|
|6||Hong Kong SAR||6.5|
South Africa is not without its problems, however, and the index reveals the areas which are a massive hindrance to businesses competing in the country.
Chief among the problems are poor health and a poor quality of education, the report shows – while the country scores rock bottom for its labour relations, inflexible labour laws, and a high cost to businesses as a result of crime.
According to survey respondents, there are a number of issues which are still seen as big barriers for doing business in South Africa – with government inefficiency, political instability and corruption listed among them.
These are the 16 highest-ranked reasons businesses are not keen on South Africa (in order, from most-cited):
- Inefficient government bureaucracy
- Restrictive labor regulations
- Inadequately educated workforce
- Policy instability
- Crime and theft
- Poor work ethic in national labor force
- Inadequate supply of infrastructure
- Tax rates
- Access to financing
- Foreign currency regulations
- Government instability
- Tax regulations
- Poor public health
- Insufficient capacity to innovate