South Africa has long been a destination for immigrants, especially from other African countries. Foreign entrepreneurs play a significant role in shaping the South African economy. The presence of these immigrants has been a complex issue that has been deeply and irrevocably scarred by violence and the notion that they are taking our jobs.
Attacks on foreign nationals have been a regular occurrence, and the fear of these attacks has driven many immigrants away. The economy has also been struggling, which has led to many South Africans feeling that immigrants are taking jobs away from them. This has resulted in a lot of tension and conflict between different groups in society.
In 2008, riot broke out against foreign nationals, and an image of a Mozambican national Ernesto Nhamuave being burnt alive shocked the world. Within a week Xenophobic violence spread across South Africa targeting foreigners and Asian nationals, which left more than 50 people killed and 100, 000 displaced. Early 2022 another incident of a Zimbabwean national Elvis Nyathi burnt alive again filled the news headlines.
The 2008 incident was symptoms of the simmering tension between local South Africans and foreign nationals. The 2012 killing of farm workers by a local businessman was another sign that something was not quite right in the country. The Xenophobic violence that has occasionally broken out since then is a manifestation of the fear and anger that many South Africans feel.
In 2013, Oba Daniels, a 38 year old Nigerian national, migrated to South Africa with one thing in mind: how he can shift the narrative of “foreigners are here to take our jobs.” As an electronics graduate, he wanted to showcase his skills, but struggled to start something of his own. In 2017, after a partnership with a friend as a car dealer, he decided to put his skills to work and opened his own business, Chat2cars dealership, in the uptown of Sandton in Johannesburg.
Since opening his business, Daniels has worked tirelessly to provide excellent customer service and quality products. His business has slowly but surely grown, and he now employs a team of five people.
Speaking to a group of foreign business owners in South Africa, Daniels said that there is no country with a monopoly on good or bad people. He argued that foreigners who own businesses in South Africa are contributing to the economy, and that by employing both South Africans and other nationals, they are also providing employment opportunities within the country.
Daniels himself has been in business for four years, and employs staff from a variety of backgrounds. He urged the group to continue to invest in South Africa, and stressed the importance of working together to create a prosperous future for all. He further said businesses by immigrants also pay tax and other expenses that go along with the business while contributing to the economy.
Immigrant-owned businesses in South Africa generate more than $1 trillion in annual revenue and employ more than 4 million people. Immigrants are also more likely to start businesses than native-born South Africans. In 2010, immigrants were nearly 30 percent more likely to start a business than native-born citizens.
The study, which was undertaken by the World Bank, looked at the positive impact immigrants had on jobs and wages in South Africa between 1996 and 2011. The study found that each migrant worker generated approximately two jobs for citizens. This is a significant finding as it shows that immigrants can be a huge boon to the economy, particularly in terms of employment. The study also found that wages increased for both citizens and immigrants as a result of immigration. This is another positive finding as it indicates that immigration can help to improve the overall standard of living in a country.
A recent study has highlighted some interesting data points regarding immigrants and their businesses. The data shows that immigrants are more likely to start businesses which successfully increase opportunities for locals while contributing to the country’s economic growth. This is an incredibly positive impact that immigrants can have on a country and its economy, and it’s something that should be taken into consideration when discussing immigration policy.
Executive director of the Diaspora Forum Nqabutho Mabhena said that locals need to be aware that foreigners play an important role in many different sectors of the economy, and that they make a significant contribution to the overall South African economy. He noted that foreigners often bring valuable skills and experience to the country, and that they can help to boost economic growth and development.
Most foreigners who live in the Southern African Development Countries (SADC) region typically purchase most of their business and household staff from South Africa and then send them to their home countries. This is because South Africa is typically seen as having a higher quality of life than other countries in the region, and as such, South African workers are highly sought-after by foreigners living in the SADC region.
“South Africa must implement the 2017 gazetted white paper on international migration because it lays the foundation for managing migration in the context of South Africa,” Mabhena added. “However, we see the selective selection in the implementation of the paper, which is concerning.” There is a popular belief in South Africa that immigrants are bad for the country’s economy.
However, research by the Institute of Race Relations (IRR) shows that immigrants often create employment and additional income opportunities for locals. The IRR published a report in 2017 which sought to detail South Africa’s immigrant population, where they come from, why they chose South Africa as their destination of choice, how many there are and where they are located. What emerged from the research is that immigrants do significantly contribute to the country’s economy.
First, immigrants create jobs for South Africans.
Research by the SA Migration Programme found in a study of 1 136 migrant businesses in Johannesburg and Cape Town that a third of these enterprises’ employees were South African. The research also found that for every 10 jobs created by migrant businesses, another seven jobs were indirectly created in the local economy. In addition to creating jobs, immigrants also bring new skills and knowledge to South Africa.
A World Bank study found that one in three highly skilled workers in South Africa is a migrant. These workers are often employed in scientific, technical, and managerial positions, and they help to transfer knowledge and skills to their South African colleagues.
As shown in the report titled “Somalinomics”, foreign traders provide another means of income to South Africans in the form of rent. This report, by the African Centre for Migration & Society and the University of the Witwatersrand, was based on a case study of Somali informal trade in the Western Cape.
According to the report, Somali traders often experience financial barriers in accessing property in townships. This often compels them to rent property owned by South African citizens. In other words, a large proportion of South Africans rent out their spazas and single rooms to foreigners, who, because of barriers such as a lack of citizenship, are prevented from accessing bank accounts, bonds, home loans or RDP housing.
Chat2cars is an online car sales company which has been operational in South Africa for over four years. The company has an international customer base and employs over sixty people, a third of which are foreign nationals.
However, not everyone in South Africa shares the same sentiment towards foreigners.
Nonjabulo Hlongwane, who is employed by Chat2cars, says that not all foreigners come to South Africa with bad intentions. Some are genuine business people who have helped the South African economy to grow.
Hlongwane points to the fact that the company would not be as successful as it is today without the help of its foreign employees. She believes that prejudice against foreigners is unfair and that more should be done.
Hlongwane, who is originally from South Africa, said that she works for a foreigner and is happy to be able to feed her family. “So this notion of saying foreigners are here to take our jobs is baseless,” she said. “Most of these foreigners are self-employed; they work for themselves.”
Lastly, foreigners contribute to national tax revenue. Although, because many foreign businesses are unbanked, their profits are undetectable and thus cannot be taxed, small-scale foreign traders and spaza operators still have to pay VAT on goods purchased from wholesalers and as a result indirectly contribute to the nation’s coffers, and stimulate wholesale turnover.
The revenue generated from foreign-owned businesses and stores provides much-needed tax income for cash-strapped governments. This is crucial in developing countries where public resources are often very limited. In addition, the taxes paid by foreign businesses can help to improve infrastructure and provide other public goods and services that benefit everyone in the country.
Ebrahim Mahomad, 56, is the founder of Qakwo Restaurant in Newtown, Johannesburg. Mohamed first arrived in South Africa as a Somali national and started a car panel beating and spray-painting shop. He then decided to open a restaurant, which has become a popular spot for Somalis living in Johannesburg. Mohamed is proud to have started a business that has contributed to the local community.
Mahomaad’s shop was looted and his brother was burnt alive during the 2008 xenophobic violence in South Africa. Mahomaad employs five South Africans in his shop and is one of those who have also found a need to contribute all they can to the host country. He says his business is one of those that contribute to the national tax revenue.
“My business is contributing a lot here in South Africa. I am renting this place and paying for bills and taxes. So how am I taking what belongs to the locals? The South African government should just come up with laws that protect businesses owned by foreigners because we are not safe here,” He said.
Spokesperson for Zimbabwe community South Africa Bongani Mazwi Mkwananzi also added his voice on the issue, that migrants’ contribution in the country are quite integrated in the labour market and their contribution must be recognised.
“The South African government through the white paper for immigration has already started to implement policies that look at how migration can be put into a positive use for economic growth, so such policies integrate migrants and harness their contribution, in human labour and other aspects” He said.
Mkwananzi’s comments echo the sentiment of many in the migrant community who feel that their contributions are often overlooked or taken for granted. There is no doubt that migrants play an important role in the South African economy and society.
The African Diaspora Policy Centre (ADPC) says that government must do more to dispel the notion that South Africa is an xenophobic nation if it wants to attract foreign direct investment (FDI).
ADPC head of research and advocacy Thabani Mdlongwa said this on Monday during a webinar on ‘Building an Inclusive Economy in South Africa’.
Mdlongwa was speaking alongside Freedom Park CEO Vusumuzi Mavuka and Helen Zille, chairperson of the Institute of Race Relations.
He said that while the government had denounced xenophobia and taken steps to prevent it, such as establishing the Xenophobia Monitoring Forum, more needed to be done to change the negative perception of South Africa.
A recent report by the Institute of Race Relations (IRR) found that foreign nationals from countries such as Somalia, Pakistan and Bangladesh are starting their own businesses upon arrival in South Africa. These businesses range from small convenience stores to wholesalers, and the foreign entrepreneurs are able to keep their profit margins low, giving them an edge over the competition.
The report also found that immigrants are good at money management, with the majority starting out with 5,000 rand (357 euros, $380) or less in capital. Within three years, all had doubled the value of their business, and 40 percent had amassed 50,000 rand or more.
It is clear that immigrants make several positive contributions to the country’s economy and labour market. However, this is not widely known as government officials appear to lack the political will to better inform people on the positive role that immigrants play in the country.
South Africa’s political leaders feed into the narrative that immigrants are a burden to South African society. This is despite the clear evidence that immigrants make positive contributions to the economy and labour market. It is time for the government to start informing the public about the positive role that immigrants play in the country.
Minister of Employment and Labour Thulas Nxesi’s recent statement that South African employers deliberately prefer foreign workers as a source of cheap labour, as they are willing to take “anything” for wages’, reveals a disturbing willingness on the part of many of the country’s political leaders to ignore human rights and discriminate against foreigners in order to appease the majority of South Africans. Nxesi’s department is now planning to introduce quotas on how many foreign workers may be hired in specific industries, a move that is likely to further exacerbate tensions between South Africans and foreigners living and working in the country.
Human Rights Watch (HRW) notes that local law enforcement officials are often complicit when discriminatory behaviour towards immigrants occurs. The organisation points out that foreign-owned businesses are disproportionately targeted in crackdowns on counterfeit goods, and that migrants are arbitrarily detained for allegedly lacking the right documents.
HRW warns that proposed measures to limit foreigners’ participation in the economy will only do more harm than good. Such policies would exacerbate the discrimination that foreign nationals already face, and would ultimately damage the economy as a whole.
As a spokesperson from the National Employers Association of South Africa recently said, it is clear that the proposed amendments to the country’s labour laws will not achieve their intended goals, and will instead cause immeasurable harm to employers, the economy, and collective bargaining relationships. The spokesperson warned that the amendments could also damage South Africa’s international relations.
South Africa is currently going through an economically tumultuous time with an unemployment rate that is much higher than it was during the financial crisis in 2008. This situation is only expected to worsen as the economy continues to struggle. In light of this, South Africa needs all the assistance it can get to stimulate the economy. Immigrants, even illegal ones, could actually help in this regard. By making the contributions of foreigners to South Africa’s economy more widely known, citizens could be encouraged to be more welcoming and accommodating. This could help boost the economy and improve the situation for everyone in the country.