South Africa’s ranking in the 2018 Index of Economic Freedom has improved, with the country ranked fourth in the Africa region and seventy-seventh out of 180 countries globally, reports Heritage Foundation.
Marketing agency Brand South Africa research GM Dr Petrus de Kock says the index provides some insight into dimensions of the South African economic environment as the country continues to grapple with historical challenges and the need to spur on entrepreneurship and innovation.
He says notable improvements for South Africa in 2018 included an improvement in the area of investment freedom and judicial effectiveness. Investment freedom improved by ten points year-on-year to 50, and judicial effectiveness improved from 59.7 in 2017 to 65.9 in 2018.
Other improvements that boosted South Africa in the economic freedom rankings are advancements in the areas of property rights, which is up from 67.6 in 2017 to 67.7 in 2018, while fiscal health improved by 4.6 points to 75.3.
Business freedom advanced by 3.1 points to 65.1, and labour freedom improved by 1.2 points to 60.1.
South Africa ranks higher on the 2018 Index of Economic Freedom than Italy – in seventy-ninth position – and Greece – in one-hundred-and-fifteenth position.
“We are pleased with the upward trend of the nation’s competitive performance, particularly since 2018 saw a decline in global competiveness of the economy, and South Africa also slipped into a technical recession during the first half of the year, which it moved out of after the economy saw a 2.2% rebound in the third quarter.
“It is, therefore, promising that South Africa, according to the 2018 Index of Economic Freedom, is ‘moderately free’ in terms of its economic activity. Economic freedom is about much more than a business environment where business flourishes; it has a far reaching impact on other aspects such as human development and the power of choice,” explains De Kock.
Consequently, it remains imperative for South Africa to continue safeguarding its market openness, prudent government size and rule of law, he adds.
On the global front, based on the measurements of this index, the Heritage Foundation finds that the global average economic freedom score is 61.1, the highest score since inception of the index 24 years ago.
At an aggregate level, of the 180 economies measured by the index in 2018, 102 scored better, while the economic freedom scores of 75 economies worsened.
