[Opinion] Foreign workers contribute to South Africa’s economy

Gerbrandt van Heerden | 05 Aug, 2021
Beyond the most recent attacks on South African trucks in the violence and looting along key routes between KwaZulu-Natal and Gauteng is a longer story of an industry embattled by criminality, and of a transport sector that has long been prone to xenophobic violence.

In a move that aligns with the fierce criticism of local truck drivers – who have accused the freight industry of preferring to employ foreigners rather than South African citizens – the government has recently taken steps to limit the number of foreign workers in the country. 

Attacks on trucks in KwaZulu-Natal have been common since 2019, with claims of their being committed by frustrated local truck drivers. Local truck driver organisations have denied any involvement in the attacks but maintain that South African job-seekers are often overlooked in favour of cheap foreign labour.

This is the background to Transport Minister Fikile Mbalula’s publishing a draft amendment to the National Road Traffic Regulations, dealing with the professional driving permits required for truck drivers. 

According to the amendment, the authority provided by a professional driving permit issued in a foreign country shall apply only to a vehicle registered in the country that issued the permit and not to vehicles registered in South Africa.  In other words, foreign truck drivers with professional driving permits issued from other countries would not be allowed to drive South African trucks. Employment and Labour Minister Thulas Nxesi has also stated that his department will seek to regulate and limit the number of people employers can hire from other countries, especially in sectors that do not require sophisticated skills. Government hopes that these proposed interventions will quell tensions and prevent further attacks and unrest in sectors such as the transport industry. 

Protests and violence against foreign nationals in South Africa are by no means a new phenomenon. In fact, Xenowatch, a platform that tracks all forms of violence levelled at immigrants and immigrant-owned businesses, has identified thousands of instances since 1994. According to Xenowatch, there have been 529 attacks on immigrants between 1994 and 2018. Since 1994, over 300 immigrants have been killed, over 900 have been assaulted, and more than 2 000 foreign-owned shops have been looted. In 2018 alone, there were 42 attacks on foreigners, with more than half of these incidents occurring in Gauteng and KwaZulu-Natal.

Anti-immigrant sentiment

These acts of violence may be committed by a small number of disgruntled and radical local citizens, but a number of surveys have shown that anti-immigrant sentiment is harboured by the majority of South Africans. A study by the Human Sciences Research Council (HSRC) highlighted a 2013 opinion poll which showed that more than three fifths of the adult population would favour closing the South African border to immigration. This poll found that many South Africans favoured restrictive immigration policies and opposed granting foreigners the same rights as citizens. 

In another study by the Ichikowitz Family Foundation, titled ‘African Youth Survey 2020’, young South Africans, unlike their counterparts in the rest of the continent, expressed a pessimistic view of foreigners and refugees. The Ichikowitz Family Foundation survey captured the feelings and attitudes of the region’s largest demographic group – its youth, by conducting 4 200 face-to-face interviews with African youth between the ages of 18 and 24 during the first half of 2019. 

In response to the statement, ‘My country has a moral obligation to help refugees from neighbouring countries regardless of their impact’, 86% in Senegal agreed while 82% in Rwanda also agreed. Young South Africans do not appear so accommodating towards people from other African countries. Nearly 60% of young South Africans interviewed believed that refugees have a negative impact on the country and should be sent back to their countries of origin. 

One of the main reasons why foreigners are treated with hostility by South Africans is because they are perceived as competitors for jobs in a country where opportunities are already scarce. The unemployment rates in Senegal and Rwanda, for example, are relatively low compared to South Africa’s. According to the World Bank, Senegal’s unemployment rate was under 10% in 2017 while Rwanda’s unemployment rate stood at 17%. During the same year, by contrast, South Africa’s official unemployment rate was 27%. This could possibly explain why Senegal and Rwanda are more likely to be more welcoming to outsiders than South Africa, as indicated by the Ichikowitz Family Foundation’s findings.

Good for South Africa’s economy

Contrary to popular belief in South Africa, however, immigrants are in fact good for South Africa’s economy. Research by the IRR shows that immigrants often create employment and additional income opportunities for locals. The IRR published a report several years ago which sought to detail South Africa’s immigrant population – where they come from, why they chose South Africa as 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. 

Second, foreign traders also provide another means of income to South Africans in the form of rent, as shown in the report titled “Somalinomics”. 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. 

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. 

From these examples, it is clear that immigrants make several positive contributions to the country’s economy and labour market. But none of this is 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.  

Feed into the narrative 

In fact, South Africa’s political leaders tend to feed into the narrative that immigrants are a burden to South African society. 

Recently, Nxesi stated that ‘…South African employers deliberately prefer foreign workers as a source of cheap labour, as they are willing to take “anything” for wages’. 

His department is planning to introduce quotas on how many foreign workers may be hired in specific industries.  It becomes quite clear that many of the country’s political leaders are willing to ignore human rights and discriminate against foreigners in order to appease the majority of South Africans. 

Human Rights Watch (HRW) also 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.

Proposed measures to limit foreigners’ participation in the economy will only do more harm than good.  

As a spokesperson from the National Employers Association of South Africa recently said: ‘(It) is clear that these amendments will not achieve what they set out to do and will cause immeasurable harm to employers, the economy, collective bargaining and international relations.’

South Africa currently is going through an economically tumultuous time. Our unemployment rate is much higher than it was during the financial crisis in 2008 and this will only get worse as the full effects of the Covid-19 pandemic hit home. Clearly, South Africa needs all the assistance it can get to stimulate the economy. Immigrants, even illegal ones, could help in this regard – and perhaps by making the contributions of foreigners to South Africa’s economy more widely known, we could encourage citizens to be more welcoming and accommodating.  

Original article here.

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