Ongoing erosion of economic liberty in South Africa is reflected in its further decline from 83rd to 87th place out of 165 countries and territories ranked in the latest Economic Freedom of the World index.
The Economic Freedom of the World: 2026 Annual Report (EFW) was released today by the Free Market Foundation (FMF) in conjunction with Canada’s Fraser Institute.
In a statement, the FMF notes: “With an overall absolute score of 6.63 out of 10, the data confirms that South Africa’s economic freedom has been on a slow, downwards trend since its peak in the year 2000, leaving the country less free today than it was at the turn of the century.”
Says Richard J Grant, Professor of Finance and Economics at Cumberland University and Senior Associate at the FMF: “South Africa’s drop to 87th place is a clear warning sign.
“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.”
Economic freedom – the degree to which individuals are permitted to make their own decisions regarding commerce, employment, and personal exchange – is fundamentally tied to national prosperity and personal freedom. The EFW index measures these levels across five key areas: Size of Government, Legal System and Property Rights, Sound Money, Freedom to Trade Internationally, and Regulation.
Out of all five categories, only Sound Money has avoided dropping below its level of 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 (over a third of total GDP) that consistently exceeds tax revenues and heavy regulation, particularly of the labour market.
“Governments cannot create lasting prosperity, but they can create the conditions within which people’s lives and property are respected,” Grant adds. “Where people are free to pursue their own opportunities and make their own economic choices, they build prosperous, harmonious, and resilient communities.”
To view an online discussion between FMF CEO David Ansara and Neil Emerick, click here.