It has been a rough ride for South Africa’s economy over the past 12 months with multiple downgrades from Moody’s, S&P, the IMF and the World Bank forecasting growth at around 2% for the year compared to 4% predicted for sub-Saharan Africa.
On Friday, the World Bank Group released a new report to compare the regulatory framework of the country’s nine major metros and four ports with 188 economies worldwide to identify regulations holding back economic growth.
The purpose of the report is to measure the impact business policies have on six key stages associated with the life cycle of small and medium sized enterprises (SME). The six indicators are access to electricity, property rights and registration, issuing construction permits, cross-border trade, enforcing contracts and the time it takes to open a business.
Overall, Cape Town is the most conducive city for SME growth in South Africa according to the report. Meanwhile, Johannesburg is number one in terms of property registration while Mangaung leads the pack in access to electricity and enforcing contracts.
“There is no correlation between the size of the city and the rankings and no city does equally well on all indicators,” said Trimor Mici, Private Sector Development Specialist for the World Bank.
The Deputy Minister of Finance, Mcebisi Jonas said, “It’s part of what we need to do moving forward, peer learning, ensuring that we pick up lessons from each of the cities and we ensure that those lessons are replicated elsewhere.”
The World Bank Group has committed to review the report in two years to produce a fresh set of results which will determine whether South Africa’s major municipalities have taken advantage of the most effective policies implemented from 188 cities worldwide.