The 2014 Index of Economic Freedom, published by the Heritage Foundation and the Wall Street Journal, showed that South Africa, ranked 75 out of 178 countries, has an overall economic freedom score of 62.5.
“According to the index, economic freedom – and thus development – is dependent on a strong and competitive private sector for which the strengthening of institutional, physical, and human capital prerequisites is necessary,” said the South African Institute of Race Relations.
“The index ranks countries with scores above 80 as ‘free’, those with scores between 70-80 as ‘mostly free’, those with scores between 60-70 as ‘moderately free’, and those with scores below 60 as ‘mostly unfree’ or ‘repressed’. South Africa was therefore ranked as a moderately free economy.”
The total score is made up of ten sub-categories, namely: property rights, freedom from corruption, fiscal freedom, government spending, business freedom, labour freedom, monetary freedom, trade freedom, investment freedom and financial freedom.
While, South Africa’s rating is higher than the global average at 60.3 as well as a number of other countries in sub-Saharan Africa, the country’s score is lower than the global average in the areas of fiscal, labour and investment freedom.
Sub-Saharan Africa as a whole has made great strides in economic freedom gaining 0.9 points on average.
“Over the past two years it has performed better than any other global region. Within the region South Africa is placed in sixth position after Mauritius, Botswana, Cape Verde, Rwanda, and Ghana. This is despite the fact that South Africa is the largest economy in the entire region,” the institute said.