2022 Index of Economic Freedom

South Africa

OVERALL SCORE56.2
WORLD RANK112
Rule of Law

Property Rights43.2

Judicial Effectiveness61.3

Government Integrity48.4

Government Size

Tax Burden63.4

Government Spending68.1

Fiscal Health8.1

Regulatory Efficiency

Business Freedom65.7

Labor Freedom71.1

Monetary Freedom78.0

Open Markets

Trade Freedom72.2

Investment Freedom45.0

Financial Freedom50.0

Create a Comparison Chart

See how South Africa compares to another country using any of the measures in the Index.

vs
Close
Download PDF
Quick Facts
  • Population:
    • 59.3 million
  • GDP (PPP):
    • $717.4 billion
    • -7.0% growth
    • -0.8% 5-year compound annual growth
    • $12,032 per capita
  • Unemployment:
    • 28.7%
  • Inflation (CPI):
    • 3.3%
  • FDI Inflow:
    • $3.1 billion

South Africa’s economic freedom score is 56.2, making its economy the 112th freest in the 2022 Index. South Africa is ranked 17th among 47 countries in the Sub-Saharan Africa region, and its overall score is above the regional average but below the world average.

The South African economy began to slow from 2017 through 2019 and turned negative in 2020. Growth resumed in 2021. During the same half-decade, economic freedom has declined. Dragged down by a sharply lower score for fiscal health, South Africa has recorded a 6.1-point overall loss of economic freedom since 2017, falling from the “Moderately Free” category to the middle ranks of the “Mostly Unfree” countries. Monetary freedom and trade freedom are promising, but the evenhanded rule of law needs to be strengthened.

IMPACT OF COVID-19: As of December 1, 2021, 89,871 deaths had been attributed to the pandemic in South Africa, and the government’s response to the crisis ranked 75th among the countries included in this Index in terms of its stringency. The economy contracted by 7.0 percent in 2020.

Close

Background

The African National Congress (ANC) has dominated politics in South Africa since the end of apartheid in 1994. Corruption scandals forced two-term president Jacob Zuma to resign in 2018. He was replaced by Cyril Ramaphosa, who secured a five-year term as president in 2019. In 2021, violent, widespread rioting erupted after Zuma was jailed. The government is considering land reform measures that include expropriation without compensation. South Africa has a highly developed economy and an advanced infrastructure. In addition to being one of the world’s largest exporters of gold, platinum, and other natural resources, it has well-established financial, legal, communications, energy, and transport sectors and the continent’s largest stock exchange. However, rates of formal-sector unemployment and crime are high.

Rule of Law

Property Rights 43.2 Create a Graph using this measurement

Judicial Effectiveness 61.3 Create a Graph using this measurement

Government Integrity 48.4 Create a Graph using this measurement

Property rights are legally recognized, and contracts are generally secure. The judiciary is competent and reliable, but courts are understaffed and underfunded, and high-level political interference has undermined judicial independence. Pervasive networks of corruption throughout the country hamper the functioning of government. Public procurement lacks transparency and competitive bidding. Some officials have acted with impunity.

Government Size

The top individual income tax rate is 45 percent, and the top corporate tax rate is 28 percent. Other taxes include value-added and capital gains taxes. The overall tax burden equals 29.1 percent of total domestic income. Government spending has amounted to 32.6 percent of total output (GDP) over the past three years, and budget deficits have averaged 7.2 percent of GDP. Public debt is equivalent to 77.1 percent of GDP.

Regulatory Efficiency

Violent crime, labor unrest, and competition from money-losing state-owned enterprises are just three of the problems that confront private businesses in South Africa. Strict labor laws make the hiring and firing of workers onerous. The unemployment rate in the second quarter of 2021 was among the highest in the world. Rising inflation is another concern.

Open Markets

South Africa has seven preferential trade agreements in force. The trade-weighted average tariff rate is 6.4 percent, and 176 nontariff measures are in effect. Private investment continues to be hindered by nontransparent laws, and foreign investment faces additional restrictions that breed inefficiency. The financial sector has undergone modernization, and the banking sector is regarded as resilient and sound.

Country's Score Over Time

View Chart of Scores over Time

Regional Ranking

RANK COUNTRY OVERALL CHANGE
1Mauritius70.9-6.1
2Cabo Verde66.72.9
3Botswana64.8-2.8
4Côte d'Ivoire61.6-0.1
5Seychelles61.1-5.2
6Benin611.4
7São Tomé and Príncipe60.34.4
8Senegal602.0
9Ghana59.80.6
10Tanzania59.5-1.8
11Namibia59.2-3.4
12Madagascar58.91.2
13Burkina Faso58.31.8
14The Gambia58-0.8
15Togo57.2-0.3
16Rwanda57.1-11.2
17South Africa56.2-3.5
18Mali55.90.3
19Gabon55.8-2.3
20Mauritania55.3-0.8
21Djibouti55.3-0.9
22Niger54.9-2.4
23Nigeria54.4-4.3
24Uganda54.2-4.4
25Guinea54.2-2.3
26Malawi530.0
27Cameroon52.9-0.5
28Kenya52.6-2.3
29Angola52.6-1.6
30Sierra Leone520.3
31Eswatini51.4-3.7
32Mozambique51.3-0.3
33Comoros50.4-5.3
34Chad49.8-0.6
35Ethiopia49.6-2.1
36Zambia48.7-1.7
37Republic of Congo48.5-2.2
38Lesotho48.1-5.4
39Liberia47.9-1.3
40Democratic Republic of Congo47.6-1.4
41Equatorial Guinea47.2-2.0
42Guinea-Bissau46-8.9
43Central African Republic45.7-3.1
44Eritrea39.7-2.6
45Burundi39.4-10.5
46Zimbabwe33.1-6.4
47Sudan32-7.1
See Entire Region List ›

View all countries ›

Back to Top