SOUTH AFRICA has made much of its induction last year into the vaunted BRICS club, consisting of Brazil, Russia, India and China, adding an S to the acronym. But it has been a struggle to justify the country's inclusion. With an economy just a quarter the size of the smallest member (India) and a population little more than a third of its least-populous one (Russia), a main qualification claimed for it is that South Africa is “the gateway to Africa”. The continent's economy is now the second fastest-growing in the world, its population is more than a billion strong (not much behind China's or India's), and its collective GDP of nearly $2 trillion is bigger than either Russia's or India's. All the same, is South Africa, still undoubtedly Africa's most powerful and sophisticated country, doing quite as well as it claims? It did indeed once serve as a landing slot for investors wary of venturing into shakier African countries to the north. But in the past couple of decades the continent as a whole has become a lot more peaceful, democratic and stable. As a result, investment has been pouring in—and often bypassing South Africa. Some African countries, with economies growing twice as fast, are challenging its claim to be the region's obvious first stop for investors. The economy of Nigeria, with some 158m people to South Africa's 50m, has been roaring along at an annual rate of almost 7% for the past eight years—and may even become Africa's biggest by 2016, with Egypt (82m people) hot on its heels. At the same time, Ghana and Kenya, among others, are competing with South Africa to host the African headquarters of foreign multinationals. General Electric, for example, recently chose Nairobi, Kenya's capital, as its sub-Saharan hub, copying firms such as Nestlé, Coca-Cola and Heineken. Used to being top dog in almost everything in Africa, South Africa has been slipping down the league tables. In 1995 it accounted for almost half of sub-Saharan Africa's GDP; today it claims less than a third. Although its economy grew at a robust 5% a year in the four years up to 2009 it has managed barely 3% since then, making it one of the slowest-growing in Africa. Its taxes are high, education is poor, and its rapid growth in real wages is outstripping productivity in almost all sectors. Foreign investment has been declining.

Jim O'Neill, the originator ten years ago of the BRIC acronym, referring to a clutch of fast-growing emerging markets with the greatest potential, says South Africa does not even deserve to be a member of the N11, the next raft of most promising developing countries. When South Africa's ruling African National Congress (ANC) first introduced inflation-targeting about 12 years ago, he had been bullish on South Africa, he admits. But not now. The country has lost its focus and can no longer be considered the continent's superpower, says Mr O'Neill, who now heads Goldman Sachs Asset Management.

Business Unity South Africa, the country's main employers' organisation, worries that South Africa is falling behind Kenya and Nigeria, among others. If Egypt settles down politically, it could become yet another magnet. Over the past five years, South Africa, with the richest mineral deposits in the world, has fallen 17 places in the Canada-based Fraser Institute's annual survey of mining-investment attractiveness—to 54th out of 93 countries and provinces. Uncertainty over the ANC's nationalisation policy is partly to blame.

Yet South Africa's decline is only relative. Despite having the continent's fifth-biggest population, it still has easily its biggest economy, with GDP per head of over $11,000 at purchasing power parity, bigger than China's or India's and more than four times the African average. Its infrastructure is by far the best in Africa. It has 80% of the continent's rail network and is home to the region's biggest stock exchange. It also has the biggest middle class, proportional to its population, of any African country.

In the Swiss-based World Economic Forum's Global Competitiveness survey, South Africa comes top in sub-Saharan Africa and 50th out of 142 in the world. In the World Bank's “Ease of Doing Business” table it comes 35th out of 183 and second in Africa (after Mauritius). For the soundness of its auditing standards and regulation of its securities exchanges, it is second to none. In a survey of corporate governance in 44 emerging countries by UBS, a Swiss bank, it came second, just after South Korea. But it gets poor marks for the rigidity of its labour market, its shortage of skills and, above all, for the perception that corruption is sharply rising. South Africa has to some extent begun to create oligarchs in the Russian mould, says UBS. That could deter investors.

In its second “Africa Attractiveness Survey”, published in May, Ernst & Young, a London-based professional-services firm, ranked South Africa fourth in Africa in terms of foreign-direct investment inflows in 2003-11. Yet when measured in terms of the number of FDI projects, South Africa was still easily the leading investment destination. Ernst &Young expects FDI inflows into South Africa to average around $10 billion a year for the next five years, creating 125,000 jobs, whereas Nigeria is expected to get $23 billion a year, but with only 95,000 new jobs.

KPMG, another professional-services firm, thinks the whole idea of a gateway into Africa is dated. Entry into African markets now depends more on the nature of the development, it says in a recent report. As a result, there are now several gateways, “obviously” including South Africa, but with Egypt, Kenya, Mauritius and Nigeria, among others, “representing no less [of an] opportunity”. South Africa is still attracting some big investments, such as Walmart's purchase last year of Massmart, a South African retailer, for $2 billion. But plainly it must look to its laurels.