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Security issues remain a great concern for SA’s competitiveness and could be scaring away potential investors, the World Economic Forum said in its global competitiveness report.
The report, which was released on Wednesday, harped on a lot of positives for SA which saw it leap up seven places from 67 to 60 in global rankings.
In the Sub-Saharan region, SA was an impressive second to Mauritius which was placed on 52 on the competitive index.
“The country is a regional financial hub with well-developed equity, insurance and credit markets, all achieving a score of 100,” the WEF said.
“SA has also developed one of the most advanced transport infrastructures in the region and is among one of the top countries in Africa for market size),” it added.
“Beyond these established strengths, health conditions—though starting from a low base —are better, adding 3.3 years to the average healthy life expectancy since the last assessment. Institutional quality has also improved but unevenly.”
Security indicators
However, security remained a great concern for SA’s competitiveness both domestically and globally. The security indicators listed in the report include organised crime, homicide rate, terrorism incidence and lack of reliable police services.
SA ranked lowly out of the 141 countries included in the report for each indicator: organised crime (128); homicide rate (135); terrorism incidence (109); and reliability of police services (121). This placed SA 135th overall for security.
The latest annual crime statistics in SA showed a major escalation in violence, with the number of murders climbing to the highest level in a decade. They also showed a rise in major crimes such as sexual assault and robbery with aggravating circumstances. A total of 179,683 crimes against women were reported.
One of the key focuses of President Cyril Ramaphosa’s presidency has been to stabilise and rebuild capacity and integrity into the criminal justice system, which was eroded under former president Jacob Zuma’s tenure. But he has not made progress.
“Security is certainly a big concern”, said the chief economist of economist.co.za Mike Schüssler. Security issues deter potential investment and can also be attributed for SA’s low score for hiring foreign labour.
“Companies are required to spend a lot of money for security, which is not the case all over the world,” said Schüssler. Xenophobic attacks deter foreign labour, making it more difficult to hire foreign workers, he said.
“High incidences of sexual violence make SA a less attractive place for female-orientated enterprises and female entrepreneurs,” says Schüssler.
The recent meeting of the World Economic Forum in Cape Town was overshadowed by marches and protests against gender-based violence, following several high-profile murders of women. Ramaphosa was forced to withdraw from a session at the WEF meeting to address these protests outside parliament.
First published in BusinessDay, South Africa: 10/10/2019