South Africa has improved its position in the 2026 World Competitiveness Yearbook (WCY) released by the Institute of Management Development (IMD) in collaboration with Productivity SA. South Africa rose to 54^th place out of 70 economies surveyed, compared to 64th in 2025. The improvement signals progress in several key areas of government efficiency, business confidence and infrastructure management, although significant structural challenges continue to weigh on the country's competitiveness and economic performance.

The annual rankings, compiled by the IMD and coordinated locally by Productivity SA, assess countries across four broad pillars: Economic Performance, Government Efficiency, Business Efficiency and Infrastructure. South Africa's overall ranking improvement reflects notable 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 release of the awards at a launch held 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".  Productivity SA is a government entity established in terms of section 31 of the Employment Services Act, No. 4 of 2014 as a schedule 3A Public Entity of the Department of Employment and Labour with the responsibility to fulfil an economic or social mandate of government, which is to promote employment growth and productivity thereby contributing to South Africa's socio-economic development and competitiveness

In his presentation Senior Economist at Switzerland 's  Institute of Management Development , Dr José Caballero said "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.

Productivity SA Chief Economist, Cele added that “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. South Africa ranked as follows in the four broad pillars that were assessed: 

Despite these gains, South Africa continues to face serious competitiveness constraints that limit economic growth and investment. The report identifies five key challenges for the country:

• Persistently high unemployment and a mismatch between skills and labour market needs.
• Low economic growth alongside rising public debt levels.
• Infrastructure bottlenecks, particularly in energy, water and logistics.
• Corruption and crime, which continue to undermine service delivery and investor confidence.
• The need for stronger support for businesses operating in high-growth sectors.
  
   
  
  The report also highlights positive perceptions of South Africa's corporate governance standards, business agility, entrepreneurial culture and openness to global markets.
  
  Productivity SA noted that while the country's upward movement in the rankings is encouraging, sustained progress will depend on addressing long-standing structural constraints, particularly unemployment, education outcomes, infrastructure reliability and economic growth.
  
   
  
  For more information:
  
   
  
  Maupi Monyemangene
  
  Productivity SA Spokesperson
  
  082 447 3232/ maupim@productivtysa.co.za
  
  For media inquiries, please contact:
  
  Teboho Thejane Departmental Spokesperson
  
  082 697 0694/ teboho.thejane@labour.gov.za
  
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  Issued by: Department of Employment and Labour
  
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