South Africa drops in Economic Freedom rankings and is now worse than Rwanda, Mongolia, and Uganda

The Economic Freedom of the World: 2026 Annual Report revealed that South Africa ranked 87th out of 165 countries and territories.

The report was released by the Free Market Foundation (FMF) in conjunction with Canada’s Fraser Institute.

Economic freedom is the degree to which individuals are permitted to make their own decisions regarding commerce, employment, and personal exchange.

The Economic Freedom of the World index measures these levels across five key areas:

• Size of Government
• Legal System and Property Rights
• Sound Money
• Freedom to Trade Internationally
• Regulation

 The latest ranking reflects a further decline for South Africa, which previously hovered at 83rd place, signalling an ongoing erosion of economic liberty.

With a score of 6.63 out of 10, the data showed that South Africa’s economic freedom has been on a slow downward trend since its peak in 2000.

Of the five categories, only Sound Money in South Africa has avoided falling below its level from 25 years ago.

However, ongoing inflation pressures and currency depreciation continue to exacerbate broader economic challenges.

The report highlights several major structural weaknesses holding South Africa back, including excessive general government spending.

This spending consistently exceeds tax revenues and, along with heavy regulation, particularly of the labour market, hurts the country’s economy.

“South Africa’s drop to 87th place is a clear warning sign,” said Richard J Grant, Professor of Finance and Economics at Cumberland University.

“Historical data show unambiguously that countries with greater economic freedom are also more prosperous, with higher average incomes and lower poverty rates.”

“Without widespread liberalisation, secure property rights, and a reduction in government overreach, South Africa will continue to suffer from anaemic growth.”

Grant said that governments cannot create lasting prosperity, but they can create the conditions within which people’s lives and property are respected.

“Where people are free to pursue their own opportunities and make their own economic choices, they build prosperous, harmonious, and resilient communities,” he said.

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Economic Freedom of the World

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Summary Economic Freedom Ratings, Third and Fourth Quartiles

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