South Africa’s business environment ranking for private companies is improving, according to a new report released by PwC on Wednesday.
PwC’s EMEA Private Business Attractiveness Index 2022 ranks the relative attractiveness of private business environments across 33 countries in Europe, the Middle East and Africa (Emea).
South Africa now ranks at position 25, marking an improvement on its 2021 ranking of 32 out of 35 territories. The report noted that this reflected positively on the country’s Economic Reconstruction and Recovery Plan which, as part of structural reforms aimed at helping the economy recover from Covid-19, pledged to make it easier for private businesses to operate in South Africa.
PwC Africa private leader, Duncan Adriaans, said SA had ranked better on the list than several EU countries.
“South Africa is now ranked as a more attractive operating environment for private business compared to several members of the European Union (EU), including Hungary (ranked 26th), Slovakia (27th), Croatia (28th), Bulgaria (29th), Greece (30th) and Romania (32nd). It would appear that the initiatives taken by our government to make South Africa more business-friendly are beginning to bear fruit. For private companies, this provides an opportunity to grow and contribute to employment creation at a national and community level,” Adriaans said.
PwC’s index ranks South Africa in the middle third of countries, placing it between position 12 and 22 across five categories, including tax and regulatory environment, public health, education, skills and talent, technology infrastructure, and startup ecosystem. The tax and regulatory environment is the country’s leading attribute on a sub-category level, with the country ranked 14 out of 33 territories. South Africa ranks 17th regarding the time senior management spends dealing with requirements imposed by government regulation.
PwC Africa Tax Controversy leader, Elle-Sarah Rossato, said Sars had implemented “noteworthy changes” which had a positive impact on the interaction between private companies and the tax collecting authority.
“This includes restructuring of the organisation and the allocation of resources - including people and technology - to recapacitate Sars,” Rossato said.
South Africa’s place in the Emea index for the percentage of global multinational corporations registered locally (ranked 13), number of investors (15), number of deals recorded (17), and Foreign Direct Investment (FDI) net inflows (18) reflects a stronger investment environment than the overall ranking for the private business landscape (25) would suggest.
However, while the report noted the overall improvement, several business environment challenges still need to be overcome. South Africa finds itself in the bottom third of territories (placed between 23 and 33) when it comes to macroeconomics, environmental, social and governance (ESG) metrics, and the private business landscape.
