Unemployment among foreign immigrants to South Africa is roughly half to a third of the local unemployment rate and they make up 11% of South Africa’s working population.
These are some of the findings in a new report released by the Institute for Race Relation (IRR) in which it is found immigrants make “a huge contribution to the South African economy through providing goods and services, paying rent and buying from South African wholesalers”.
South Africa hosts more undocumented immigrants per capita than wealthier countries like the UK and Germany, and almost as many as the USA.
Yet, according to the IRR report released today (Monday, 13 March), most refugees and immigrants who come to South Africa seeking a better life, manage to actually do so.
The report asks, “in the context of high levels of xenophobic violence, what do South Africans lose if all immigrants are sent home?
• Low prices and convenience: Immigrant-owned spaza shops allow township residents to shop on their doorsteps and their prices are usually the cheapest in the city.
• Rentals: Some 70,000 to 90,000 South Africans are now renting their spazas to foreign traders. Immigrants also need places to stay, so they pay commercial as well as residential rents.
• Economic stimulation: The majority of foreign traders started out with capital of R 5 000 or less. Within three years, however, all had at least doubled the value of their businesses, and 40% had amassed R 50 000 or more. It’s worth noting that small-scale street traders and spaza operators cannot escape paying VAT on goods purchased from wholesalers, thereby contributing to the nation’s coffers and thus the economy.
• Self-respect: Sending people fleeing war zones home would be dishonourable and cruel.
The author of the report and IRR research fellow Rian Malan says: “If the ANC is to turn South Africa into a ‘nation of entrepreneurs, not job seekers’, policy makers can learn from the example of immigrants to boost entrepreneurship, economic growth and job creation by making tender processes transparent, awarding contracts to the lowest bidder, and allowing the winners to sink or swim in the real world, like the industrious immigrants and Kasikos entrepreneurs I spoke with.”