A new Economist Intelligence Unit (EIU) research report, commissioned by Citi, reveals that Johannesburg and Cape Town are the highest ranking African Cities in terms of competitiveness, ranking 67th and 73rd respectively out of 120 cities.
The report, entitled Hot Spots, ranks the most competitive cities in the world for their demonstrated ability to attract capital, business, talent and tourists. With a combined population of about 750 million, the 120 cities ranked in Hot Spots represent approximately 29 percent of the global economy and generated a combined GDP of US$20.24 trillion in 2011.
“This report was commissioned for us to comprehend the importance of market competitiveness and to recognize where growth, opportunity and talent are likely to be found in the future. These findings offer significant facts which can be utilized to the benefit of our clients, institutions, and municipalities,” says Citi South Africa Chief Country Officer Donna Oosthuyse.
The economies of several African and Latin American cities have expanded from 2010 and are set to expand further until 2016 with Lagos achieving a 6.8% annual growth rate, Lima (6.8%), Bogota (5.4%), Medellin (5.4%), and Nairobi (5.2%). All these cities are expected to be among the world’s 40 fastest-growing cities from 2012-2016.
With concomitant improvement in some other aspects of competitiveness – such as the quality of infrastructure and their regulatory environments – these cities could rise up in the index rankings quickly.
Despite this good news for South Africa, African and Latin American Cities are generally less competitive on a global scale. South African cities were the only contenders which provided decent competitors amongst African Cities with Latin America only having one representative in the top half of the index. Although this could seem discouraging the report could assist developing countries improve their current standings, especially since emerging economies have the added advantage of being able to attract the world’s top talent.
Overall, it was European and U.S. cities which are the most competitive globally. According to the report, the ten most competitive cities in the world are: New York (1st), London (2nd), Singapore (3rd), Paris and Hong Kong (joint 4th), Tokyo, (6th), Zurich (7th), Washington, DC (8th), Chicago (9th), and Boston (10th).
“Economic dynamism is definitely rising elsewhere, especially in Asian cities, but U.S. and European cities have legacy advantages that give them a strong competitive edge,” said Leo Abruzzese, the EIU’s global forecasting director. “In particular, these developed cities are better at attracting top talent from across the world.”