South Africa has improved its position in the 2026 World Competitiveness Yearbook (WCY), climbing 10 places to rank 54th out of 70 economies surveyed, according to the latest report released by the Institute of Management Development (IMD) in collaboration with Productivity SA.
The country moved up from 64th position in 2025, reflecting gains in government efficiency, business confidence and infrastructure management.
In a statement, the Department of Employment and Labour said the improvement signals progress in several key areas of government efficiency, business confidence and infrastructure management, although structural challenges continue to affect the country's competitiveness and economic performance.
The annual rankings, compiled by the IMD and coordinated locally by Productivity SA, assess countries across four pillars: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure.
The department said that South Africa's improved overall ranking was driven by gains in government policy adaptability, transparency, management of cities, energy infrastructure, public finances and efforts to address bureaucracy and corruption.
Improvements were also recorded in employment growth trends, exchange rate stability and health infrastructure.
Speaking at the launch of the rankings in Midrand, Gauteng, Productivity SA Chief Economist Dr Lungelo Cele said the 2026 results “suggest improved confidence in aspects of the policy and institutional environment”.
The report showed significant progress in Government Efficiency, where South Africa improved by nine places from 63rd to 54th, while Business Efficiency recorded the largest improvement, rising 15 places from 57th to 42nd.
Infrastructure improved by three places from 62nd to 59th, while Economic Performance declined marginally from 63rd to 64th.
Overall, the country improved from 64th position in 2025 to 54th in 2026.
Senior Economist at Switzerland's Institute of Management Development, Dr José Caballero, emphasised the importance of long-term investment in sustaining competitiveness.
“Competitiveness is built, not granted, and to grow competitiveness there must be investment in long-cycle assets (e.g., infrastructure, education, R&D) that compound over years,” Caballero said.
While welcoming the improvement, Cele cautioned against viewing the results as evidence of a complete turnaround.
“The improvement should be viewed with caution and interpreted within the broader context of ongoing structural economic challenges. While perceptions regarding aspects of the business environment, institutions, and governance improved, South Africa continues to face persistent challenges.
“The rankings therefore suggest positive momentum in some areas, but not yet a comprehensive competitiveness turnaround,” Cele said.
Despite the gains, the report identified several constraints that continue to hamper economic growth and investment.
These include persistently high unemployment and a mismatch between skills and labour market needs, low economic growth coupled with rising public debt, infrastructure bottlenecks in energy, water and logistics, as well as corruption and crime that undermine service delivery and investor confidence.
The report also highlighted the need for stronger support for businesses operating in high-growth sectors.
At the same time, the study noted positive perceptions of South Africa's corporate governance standards, business agility, entrepreneurial culture and openness to global markets.
Productivity SA said sustained progress would depend on addressing long-standing structural constraints, particularly unemployment, education outcomes, infrastructure reliability and economic growth. – SAnews.gov.za
