Studies Prove Immigrants are more Important to South Africa’s Economy than we Know

The belief by some South Africans that foreigners are taking their jobs is a misconception that lacks basis. This misconception has over the years, caused several attacks on innocent foreigners with many deaths and displacements. The latest of such attacks was the horrible incident a few weeks ago in Durban. But South Africans must realize that killing or other forms of hostility to immigrants, many of who are investors, will only further harm the economy as many locals will lose jobs in companies owned by foreigners that they want out of the country. 

Instead, South Africans need to be more tolerant since no country will thrive by isolating itself from foreigners, especially when such foreigners are enterprising. If South Africans can ask their government to enact more business favorable policies like deregulation of key sectors like energy and reduce state control of the economy, there will be more jobs for South Africans.

Immigrants are the Backbone of the South African Economy

According to Migrating for Work Research Consortium, immigrants make up only 4 percent of South Africa’s 33-million strong working population. And out of this slim number of immigrants, 32.65 percent of them are employed in the informal sector compared to 16.57 percent of “non-migrants.” The study found that this is because the informal sector offers the lowest entry cost into the labor market and that immigrants survive by creating jobs for themselves and also by employing natives.

Another study in 2018 which focused on “Mixed Migration, Forced Displacement and Job Outcomes in South Africa,” revealed that immigrants in South Africa had a positive impact on employment and wages for locals between 1996-2011. It showed that each immigrant worker generated approximately two jobs for South Africans. In the end, it is not foreigners stealing jobs, but foreigners are the ones providing jobs for the many unemployed South Africans.

A Stats SA report in 2017 indicated that the number of people living in extreme poverty—defined as an income of less than R992 a month—has increased to almost 14 million, from just over 11 million in 2011. This, according to the CEO of the Institute for Security Studies, is caused by an active anti-immigration policy instituted by the department of home affairs across the border that deters highly skilled professionals and entrepreneurs. Some experts even believe that South Africa needs more skilled foreigners to create jobs and share new skills with South Africans.

The Consequences Reaches Beyond the Economy

Xenophobia is already having a negative effect on South Africa. Out of fear, fewer students are now enrolling in South African universities.

Professor Maxi Schoeman of the University of Pretoria expressed the sad state of diversity at the university. She was very concerned about the drop in the enrollment of international students and claimed that an inquiry by the school pointed to xenophobia as the cause. This is because parents are scared to send their children to the school—as it is at most South African universities.

In 2018 when President Cyril Ramaphosa visited Nigeria to discuss some business issues with Nigeria investors, a question came from one of the participating investors. The individual asked why they should be investing in a country that does not ensure the safety of immigrant workers. Even as President Ramaphosa claimed his administration is tough on intolerance, the reality on the ground doesn’t corroborate his answer.

The damning consequence is that investors are now taking South Africa off their lists because the investors can no longer guarantee their own safety and those of their workers. Whereas South Africa needs all the jobs it can get in its economy but xenophobia will not allow that to happen.

South Africans still living in the misconception that foreign immigrants are stealing their jobs should get it right. It is only through foreign investment—part of which is driven by immigrants—that more jobs will be added to the economy. Immigrants are not stealing jobs; It is a fable and hearsays.

Abdullah Tijani is a Writing Fellow at African Liberty and Local Coordinator at Students For Liberty. He is a law student at the Usmanu Danfodiyo University, Sokoto, Nigeria.  He’s on Twitter @AbdullahAtijani.

Photo Credit: Stephen Philpott