THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

South Africa

Ranked 48th of 149

At a glance

Ranks

48 th on the Legatum
Prosperity Index™

111th
37th
33rd
70th
126th
115th
24th
37th
45th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, South Africa performs best on Personal Freedom and Governance and scores lowest on the Health sub-index.

Visit our Rankings table to see how South Africa compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

South Africa is an upper-middle income country that delivers slightly more prosperity as expected given its wealth. Since 2007, the biggest change has occurred in the Social Capital sub-index, with a 53 rank improvement coupled with a significant prosperity surplus.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

South Africa has an extremely varied performance across the nine sub-indices in the 2016 Prosperity Index. While the country retains the biggest prosperity surplus of all Africa in the Personal Freedom sub-index, its overall performance is negatively affected by alarmingly low scores in the Health sub-index.

South Africa’s best performance comes in the Personal Freedom sub-index, where its score puts it in the top 25 in the world. Many factors are behind this success, but a quasi-total absence of government or social restrictions on religion and improved LGBT rights stand out. In this respect, it is worth recalling that in 2006 South Africa became the first country on the continent, and the 5th in the world, to legalise same-sex marriage. Additionally, the percentage of South Africans satisfied with their personal freedom has also increased: it was 68 percent in 2007, it is now 86 percent –the second biggest value in the region, which has an average of 68 percent.

 Personal Freedom Score in Sub-Saharan Africa (av.), the world (av.), and South Africa.
South Africa’s best performance comes in the Personal Freedom sub-index, where its score far exceeds both the Sub-Saharan Africa and the world averages, nearing that of the Top 30 of the Index.

Governance is another sub-index where South Africa performs well, sitting just out of the top 30. However, people’s perceptions seems to be declining: over the last ten years, the Index has recorded decreasing values in both confidence in national government (from 66% to 58% of the population) and its effectiveness, which is 33% lower than it was in 2007. Additionally, corruption is perceived to have increased, though among its regional peers South Africa remains one of the least affected. On a much brighter note, there are more women in national parliament than there were ten years ago: with 41.5% of MPs being women, South Africa ranks 3rd in the region, after Rwanda and Senegal. Overall, a high level of democracy keeps the political environment relatively stable, but the government should focus on regaining its people’s confidence if it is to push into the top 30 in this sub-index. Nevertheless, the structural foundations for prosperity in South Africa are strong.

The Index shows a less positive picture when it comes to the Economic Quality sub-index: while South Africa is still one of the largest economies of the African continent, with a stock-exchange that is in the top 20 in the world, GDP growth seems stuck in low gear. Unemployment affects now 25% of the population, with a particular high rate among the youth. The necessity of addressing these domestic constraints is mirrored in the 2030 National Development Plan, which aims to double GDP and to drastically reduce poverty and inequality: in fact, the country still has a high level of relative poverty, though it has decreased since 2007 from 66% to 53%.

Like its peers in the region, for South Africa the Health sub-index represents one of the biggest challenges. Here the country presents a very poor performance, especially when compared to its other sub-index performances. It is limited in particular by high HIV/AIDS and TB infection rates. Unsurprisingly then, life expectancy at birth is severely lowered by these epidemics: as of 2016, it is at 57 years, far below the world average.

Life expectancy at birth in Sub-Saharan Africa (av.), the world (av.), and South Africa.
Life expectancy at birth is severely lowered by HIV/AIDS and TB epidemics: as of 2016, it is 57 years, far below the world average.

As far as the Business Environment sub-index is concerned, South Africa presents a mixed performance: whilst its policies make it relatively easy to start new businesses, the country still faces some barriers in getting both credit and electricity. In order to improve the situation, South Africa has started new programmes in partnership with international institutions, and is developing new power stations aimed at enhancing power grid reliability. Nevertheless, its performance here is good for the region. If it can tackle its health and other problems, South Africa has the potential to generate significant levels of prosperity.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.