South Africa’s has failed to improve its standing in the latest Global Economic Freedom of the World report, remaining at 83rd out of 165 countries for the second year in a row. The findings, compiled by Canada’s Fraser Institute, highlight the country’s ongoing struggle with structural barriers that continue to weigh on growth, job creation, and prosperity.
Neil Emerick, Deputy Chairman of the Free Market Foundation (FMF), described the outcome as a “sobering position in the middle that underscores the country’s lack of meaningful progress.”
He noted, “South Africa is once again ranked 83rd in the world for economic freedom, unchanged from last year and far behind the countries that are pulling ahead in growth, jobs, and prosperity.
Unless we tackle the size of government, secure property rights, and open ourselves to trade, we’re condemning ourselves to stagnation.”
The FMF stressed that the index reflects the consequences of policy choices across taxes, investment, law and order, inflation, and trade. Emerick pointed out that freer economies consistently deliver more opportunities for both consumers and producers. “Free markets are just going to produce better and higher-quality outcomes than governments are able to do,” he said.
Challenging the perception that economic freedom exacerbates inequality, Emerick explained that while income shares for the poorest remain similar, absolute income levels are significantly higher in free societies.
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“The poorest 10% of people in free economies earn on average about $7,500 (R128,916) a year, compared to under $1,000 (R17,188) in unfree economies,” he said. “That’s a ninefold difference, and we know it’s true because we only need to see which direction the boats travel. People flee unfree societies for freer ones because life is better.”
The report noted strengths for South Africa in areas such as sound money, trade freedom, and private banking, but also pointed to severe weaknesses. “Our government consumption is high, our top marginal tax rates are among the worst in the world, and that discourages our top taxpayers from staying,” Emerick said.
On law and order, South Africa performed well in the courts but poorly in policing and enforcement, ranking 138th. “That’s hugely important because if you fail on property rights and contract enforcement, nothing else matters. You can’t have a functioning market without those basics,” Emerick warned.
Labour regulation was also identified as a significant hurdle. The country ranked 140th in hiring and firing practices, with rigid regulations undermining workplace flexibility.
“The index is essentially pointing to the same problems South Africans read about in the newspapers every day. We know what we need to fix, we just need to get around to fixing it,” Emerick said. For him, the broader lesson is that economic freedom extends beyond growth figures.
“People in freer societies are healthier, live longer, and report greater life satisfaction. If South Africans can connect the dots between freedom and their own daily lives, they might start demanding the reforms that will actually improve their prosperity.”
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Image Credit: Northern Africa News
