Cape Town ahead of Joburg in latest finance ranking as economies shift

The Global Financial Centres Index (GFCI 32) provides evaluations of future competitiveness and rankings for 119 financial centres around the world, including two cities in South Africa – Johannesburg and Cape Town.

The report, a collaboration between China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London, is updated and published every March and September.

It is compiled using 151 instrumental factors, grouped into five broad areas: Business Environment, Human Capital, Infrastructure, Financial Sector Development, and Reputation. These quantitative measures are provided by third parties, including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations.

The instrumental factors are combined with financial centre assessments provided by respondents to the GFCI online questionnaire. GFCI 31 uses 66,121 assessments from 11,038 respondents.

New York leads the index, with London second, ahead of Singapore in third place, which has overtaken Hong Kong in fourth position. Paris returned to the top 10 in the index, replacing Tokyo, which fell to 16th place, perhaps reflecting a comparatively slow consumer recovery following the Covid-19 pandemic, the authors said.

The rankings of China’s financial centres continue to climb steadily. A total of 12 financial centre cities on the Chinese mainland are on the list. Beijing maintains its 8th position among global financial centres, and Shenzhen moves up one spot to the 9th.

Among the top 40 centres, three centres rose 10 or more rank places, and one fell more than 10 places. All but one centre in the top 40 increased their rating in the index, and only 11 of the total 119 centres fell in the ratings.

Middle East & Africa

Dubai and Abu Dhabi take first and second places in the region, with Dubai stable in the rankings at 17th place and Abu Dhabi dropping one ranking place.

Casablanca continues to be the leading African centre, maintaining its 54th position overall, while other African centres fell in the rankings.

Cape Town beats out Johannesburg, ranking 64th ahead of the country’s biggest city, which ranks 65th. Both cities have slipped down the ranking from the 31st edition of index.

Middle Eastern & African Centres

Big economic shift to Cape Town

New building data for South Africa shows an economic shift between the two regions – with the Western Cape’s annual building plans passed for 2022 likely to exceed those of Gauteng for the first time in recorded history.

“Years of building a popular ‘brand’ as a lifestyle and well-run region appears to be increasingly paying off for the Western Cape economy and property market,” said FNB property strategist John Loos.

Loos said that for over two decades, FNB had noticed a mounting “net semigration” trend of skilled and higher income households, most notably in the direction of the Western Cape, but also to certain KZN coastal regions.

“This has led to the expectation that the Western Cape economy would at some point begin to outperform the rest, because SA’s modern services-dominated economy is heavily dependent on skilled labour, and the Western Cape is best at attracting and retaining these.”

On top of this, skilled migrants bring significant purchasing power to the region, he said.

FinTech

The China Development Institute (CDI) and Z/Yen Partners have also assessed 113 centres for their Fintech offering.

New York retains its leading position in the Fintech ranking, followed by San Francisco, Los Angeles, and London, with Shanghai and Beijing in fifth and sixth place.

Chinese, US, and German centres performed well in the Fintech ratings, with Atlanta, Chengdu, Berlin, Stuttgart, San Diego, Tianjin, Dalian, Nanjing, Hangzhou, and Wuhan improving more than 10 rank places.

Outside of these countries. Helsinki, Oslo, and Lugano also gained more than 10 rank places.

Cape Town again ranks above Johannesburg for Fintech.

Read: Big economic shift to Cape Town spells trouble for Gauteng