South Africa has ranked eighty-seventh out of 165 countries and territories in the ‘Economic Freedom of the World: 2026 Annual Report’ (EFW), published by the Free Market Foundation (FMF) in conjunction with Canada’s Fraser Institute.

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

With an overall absolute score of 6.63 out of ten, the data confirms that South Africa’s economic freedom has been on a slow, downward trend since its peak in the year 2000, leaving the country less free today than it was at the turn of the century, FMF states.

“South Africa’s drop to eighty-seventh place is a clear warning sign,” says FMF senior associate and Cumberland University finance and economics professor Richard Grant.

“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,” he warns.

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, which exceeds one-third of GDP and consistently exceeds tax revenues, as well as 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. Where people are free to pursue their own opportunities and make their own economic choices, they build prosperous, harmonious and resilient communities,” says Grant.

The FMF continues to advocate for policy reforms under its Liberty First initiative, identifying key structural changes necessary to reverse South Africa's economic decline, restore investor confidence and foster growth.