In PwC’s latest Europe, Middle East, and Africa (EMEA) Private Business Attractiveness Index, South Africa secures the 23rd position out of 33 countries. The 2023 index reflects a score of 40.7/100, a slight decline from 42.1 in 2022 but a substantial improvement from 33.6 in 2021. PwC notes that despite operational challenges, the country is increasingly becoming an attractive location for private business within the EMEA region.
Duncan Adriaans, PwC Africa private leader, emphasizes that South Africa ranks more favorably than certain European Union (EU) members, including Hungary, Latvia, Slovenia, Greece, Romania, Bulgaria, and Croatia. Notably, South Africa surpasses the only two other African countries recorded, Kenya and Nigeria.
Adriaans attributes the two-year improvement to South Africa’s Economic Reconstruction and Recovery Plan (ERRP). Launched in 2020 to facilitate economic recovery post-Covid-19, the plan focuses on making it easier for private businesses to operate. Regulatory reforms and incentives, particularly in renewable energy installation, contribute to this positive trend.
PwC compiles the annual report, evaluating and ranking 33 countries based on various attributes that determine their suitability for private businesses. Switzerland tops the list with a score of 73.1, followed by Sweden, Germany, Netherlands, and Denmark.
To ascertain the overall rankings, PwC considers 64 metrics across nine categories. South Africa’s 2023 private business environment sub-index rankings reveal insights into its strengths and areas for improvement:
Despite challenges in governance-related areas, South Africa’s performance in social responsibility and governance stands out, reflecting a level of trust within society. Adriaans sees this as a positive signal for the country’s outlook in 2024, stating that countries supporting entrepreneurial and private business activities remain attractive despite short-term economic or social challenges.
However, PwC cautions that South Africa’s 23rd position out of 33 indicates persistent challenges. Stats SA data reveals that over 1,500 companies closed in 2023, excluding December figures. Pressing issues such as electricity problems, skills shortages, high unemployment rates, crime, corruption, deteriorating transport and logistics services, and difficulties in accessing capital and finance for entrepreneurs and private businesses contribute to these challenges.
In conclusion, South Africa’s improving ranking in PwC’s EMEA Private Business Attractiveness Index underscores positive trends in the country’s business environment. However, persistent challenges highlight the need for comprehensive and sustained efforts to address issues hindering private business operations. As the nation navigates these obstacles, the focus on governance, social responsibility, and fostering a supportive entrepreneurial ecosystem remains crucial for sustained growth and attractiveness on the global stage.
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