South Africa Climbs 10 Places in Global Competitiveness Ranking

The World Competitiveness Yearbook evaluates economies across four major categories: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure.

South Africa has improved its standing in the 2026 World Competitiveness Yearbook (WCY), moving up 10 places to rank 54th out of 70 economies assessed globally. The latest rankings, published by the Institute of Management Development (IMD) in partnership with Productivity SA, place South Africa significantly higher than its 64th position in 2025. The improvement reflects progress in several areas linked to government performance, business operations and infrastructure management.

According to the Department of Employment and Labour, the results indicate growing confidence in parts of the country's policy environment and institutional framework, even as a number of long-standing economic challenges continue to weigh on growth and investment. The World Competitiveness Yearbook evaluates economies across four major categories: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure.

Business efficiency records the biggest improvement

The strongest area of progress came from Business Efficiency, where South Africa jumped 15 places from 57th to 42nd. Government Efficiency also improved notably, rising nine positions from 63rd to 54th. Infrastructure performance showed moderate improvement, moving up three places from 62nd to 59th. Economic Performance was the only category to decline slightly, slipping one position from 63rd to 64th.

The report credits the country's improved ranking to better perceptions around policy adaptability, transparency, management of cities, public finances and energy infrastructure. Progress was also noted in efforts to reduce bureaucracy and combat corruption. Additional improvements were recorded in employment growth trends, exchange rate stability and the quality of health infrastructure. Speaking at the launch of the report in Midrand, Productivity SA Chief Economist Dr Lungelo Cele said the findings suggest growing confidence in parts of South Africa's policy and institutional environment.

Structural challenges continue to limit growth potential

Despite the positive movement in the rankings, economists cautioned that the results should not be viewed as evidence that the country's economic challenges have been resolved. Cele said the improvement needs to be understood within the broader context of ongoing structural constraints that continue to affect competitiveness. He noted that positive perceptions regarding governance, institutions and the business environment have improved, but deeper economic challenges remain.

The report highlights several issues that continue to hamper growth, including persistently high unemployment, skills shortages and a mismatch between education outcomes and labour market needs. Concerns were also raised about slow economic growth, rising public debt and infrastructure constraints affecting energy, water and logistics networks. Corruption and crime remain significant concerns because of their impact on investor confidence and service delivery.

At the same time, the study identified strengths in South Africa's corporate governance standards, entrepreneurial culture, business adaptability and openness to international markets. IMD Senior Economist Dr José Caballero emphasised that sustained competitiveness depends on long-term investment in infrastructure, education and research. Productivity SA echoed this view, saying future gains will rely on addressing structural challenges while maintaining momentum in governance reforms, infrastructure development and job creation initiatives.