"It also does well on measures of the quality of institutions and factor allocation, such as intellectual property protection [30th], property rights [30th], the accountability of its private institutions [3rd], and its goods market efficiency [32nd]."

The report said South Africa's financial market development, in which it ranked fourth, was "particularly impressive" and showed "high confidence in South Africa's financial markets at a time when trust is returning only slowly in many other parts of the world".

"South Africa also does reasonably well in more complex areas such as business sophistication [38th] and innovation [41st], benefiting from good scientific research institutions [30th] and strong collaboration between universities and the business sector in innovation [26th]."

This made South Africa the most competitive economy in the region.

The country would, however, need to address some weaknesses, particularly on labour issues, to improve its competitiveness. "South Africa ranks 95th in labour market efficiency, with rigid hiring and firing practices [139th], a lack of flexibility in wage determination by companies [138th], and significant tensions in labour-employer relations [138th]."

The report said university enrolment rates were too low. "Efforts must also be made to increase the university enrolment rate of only 15%, which places the country 97th overall, in order to better develop its innovation potential."

Infrastructure was good by regional standards, but needed upgrading.

"The poor security situation remains another important obstacle to doing business in South Africa. The business costs of crime and violence [136th] and the sense that the police are unable to provide protection from crime [95th] do not contribute to an environment that fosters competitiveness."

The report also found that the health of the workforce, which is ranked 129th out of 142 economies, was concerning.

Switzerland topped the overall rankings, Singapore was second, and Sweden was in third position.

In compiling the report, the World Economic Forum's Centre for Global Competitiveness and Performance looks at the business operating environment and competitiveness of over 130 economies worldwide.

SA - the Good News via SAPA

You can read Steuart Pennington's recent newsletters on SA's global competitiveness here, how SA compares to the other BRICS nations here and how SA compares to 6 African countries here.