South Africa has lost the top spot in Standard Bank’s Africa Trade Barometer to Mozambique, with the country no longer enjoying a clear edge over its African peers.
The country is also no longer the most industrialised economy on the continent, losing that title to Morocco in the latest rankings from the African Development Bank.
Standard Bank’s ranking broadly measures the ‘tradability’ of African countries, which measures how easy it is to do business in these jurisdictions.
The bank focuses on ten countries where it has a significant presence and is able to collect independent data on local business confidence, survey its clients, and understand operational challenges.
The ten countries ranked by the bank include South Africa, Angola, Ghana, Kenya, Mozambique, Namibia, Nigeria, Tanzania, Uganda, and Zambia.
For Issue 5, the bank surveyed 2,218 businesses that operate in these countries alongside economic data released by governments.
South Africa has traditionally dominated this ranking and many other economic indices in Africa, thanks to its developed economy, sophisticated financial services sector, and high-quality infrastructure.
However, in recent years, the gap between it and many other African countries has closed, and now those states are much more attractive to investors and businesses.
This is one of the reasons why Standard Bank, and other South African banks, have expanded so aggressively into Africa in recent decades. They want to capture value from faster-growing economies.
One thing African economies lack is access to reliable data, which is why Standard Bank produces its African Trade Barometer.
The latest edition shows that South Africa has slipped from its top spot on the index, with Mozambique replacing it as number one on the tradability index.
Standard Bank explained that the categories underpinning the ranking are macroeconomic environment, stability, government support, infrastructure constraints, openness, financial behaviour, and access to financing.
This is combined into the Standard Bank 3-year Quantitative Trade Barometer, where South Africa dropped to second place as well.
The sentiment of businesses is compiled into the Standard Bank Firm Survey Trade Barometer, where South Africa ranked fourth, behind Tanzania, Angola, and Namibia.