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South Africa needs drastic improvement in productivity

Johannesburg - South Africa has drifted closer to the bottom of a global competitiveness index of 55 countries this year, hit by skills shortages, unemployment and weak infrastructure, where it ranked last, Business Day reported on Thursday.

South Africa’s rating slipped to 53 from 50 last year - beating just Ukraine and Venezuela - according to the index produced by the Swiss-based International Institute for Management Development (IMD).

"It appears SA is losing ground even with comparable countries," said Sollo Mosai, head of knowledge management at South Africa’s National Productivity Institute, an independent body which carries out the research for the survey.

South Africa had to improve productivity to make up for the fact that consumption rather than investment and exports have driven economic growth in the past few years, he said.

"For the future, as consumer demand slows, increasing living standards will depend more on improving the competitiveness of SA’s export sectors," he said.

Mosai’s assessment is in line with recommendations from an international panel of experts advising the government on how to boost economic growth, on a sustainable basis.

The IMD scoreboard, always focusing on the year before, rates economies’ ability to create a competitive business environment. It ranks them according to 331 criteria in four categories - government efficiency, business efficiency, economic showing and infrastructure.

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