South Africa slips in world ranking
Zululand economist explains how rampant red tape, power problems and poor education have reduced SA on the ranks.
SOUTH Africa is stepping backwards on the world stage as the World Bank’s Doing Business report for 2015 indicates the country has fallen by six spots on the rank.
Out of 189 countries, SA dropped from 37th place to 43rd.
The country was demoted in seven of the ten sub-categories, including ‘ease of starting a business’, ‘getting electricity’ and ‘trading across borders’ – and did not improve in any.
Deputy Dean in the Faculty of Commerce Administration and Law at the University of Zululand (Unizul), Irsshad Kaseeram, believes there are several major obstacles crippling SA’s standing as a popular investment attraction.
‘We are ranked lowly in terms of mathematics and science education, flexibility of our labour policies, access to electricity and excessive administrative hurdles in doing business in South Africa,’ said Kaseeram.
‘All this serve as a disincentive to want to do business in South Africa and blocks economic growth and employment.
‘Foreign investors have been complaining frequently regarding the ‘red tape’ in doing business here, given the swing of compliance measures that have emerged in recent years.
‘Such administrative hurdles create incentives for rent-seeking behaviour among government officials – it is a deterrent.’
Kaseeram believes that SA should ideally have a free economic trade zone on the African Continent to boost the economy since other African countries are growing at a rapid pace.
‘The current situation is inefficient and is reducing our growth potential.
‘This is compounded by the fact that our traditional European and American trading partners are growing at a very slow pace compared to the African economies which are expected to grow at a sustained rapid pace over the next decade.’
Despite all the setbacks, Kaseeram thinks SA has not yet lost its status as the ‘gateway to Africa’.
‘We fared ahead of Nigeria – the largest African economy – which was placed in the 127th position.
‘South Africa was ranked relatively highly in regard to the development of the financial sector, financial markets, air-transport infrastructure and world class competition (anti-monopoly) policies.’
