Double standards: SA depends on remittances from citizens abroad for 1% of economy while most immigrants in SA are employers
By Lee Mwiti
THE argument by South African xenophobes following the deadly targeting of mainly African nationals has been that the foreigners are taking their jobs and competing for scarce resources.
It is a view that has been tacitly supported by ruling party politicians, with some ministers saying that foreign nationals were in the country only as a “courtesy” and that they should share their business secrets if they want to prevent attacks and looting.
On the face of it the figures add up: the official South African unemployment rate is 24%, rising to 50% among young people, and one fifth of the population of 54 million survive on less than 335 rand ($28) a month.
The numbers of migrants also seem high: there are for example some one million Zimbabweans in South Africa, mostly illegal, making them the single biggest community of foreign nationals in the country.
Other countries with significant nationals in the country are Somalia. Ethiopia, Malawi, Mozambique, and to a smaller extent the Asian countries of Pakistan, Bangladesh and China.
But a fact-checking article published in February debunked the claim that foreign nationals, derisorily referred by locals as “amakwerekwere” have “stolen” South African jobs.
AfricaChecks’s review, based on study numbers from the Migrating for Work Research Consortium (MiWORC), an organisation that examines migration and its impact on the South African labour market, concluded that the perception was far from the reality.
MiWORC found that 96% of the working population aged between 15 and 64 were South Africans, and only 4% could be classified as “international migrants”. Of the 33 million people captured in Statistics SA 2012 data, this meant about 1.2 million international migrants.
Eight in every ten (79%) of these migrants were African, 17% white and about 3% Indian or Asian.
White foreign nationals have not been targeted.
And while international migrants were more likely to be employed than South Africans, MiWORC said this was an exception to the general rule where international migrants tend to have higher unemployment rates that locals.
But the migrants in South African also tended to be in precarious employment, compared to locals, widely bereft of access to benefits or formal contracts, largely because they were more willing to take jobs that locals did not want, especially in the informal sector.
But the migrants were also far more likely to run their own businesses in South Africa, with 11% being “employers” and 21% “self-employed”. By contrast, only 5% of South Africans were employers, and only 9% of non-migrants and 7% of domestic migrants (those who move from the provinces) were self-employed.
Quoting Dr Sally Peberdy, a senior researcher at the Gauteng City-Region Observatory, AfricaCheck said that the belief that international migrants dominate the informal sector is false.
“We found that less than two out of 10 people who owned a business in the informal sector [in Johannesburg] were cross-border migrants,” Dr Peberdy said, referring to a limited study done on the informal sector in Johannesburg.
“The evidence shows that they contribute to South Africa and South Africans by providing jobs, paying rent, paying VAT and providing affordable and convenient goods.”
“Forcing” migrants to stay
But new data from the World Bank shows that despite this, the obstacles South Africa has mounted in the path of the migrants continue to be significant.
In its most recent Migration and Development Brief, the bank found that sub-Saharan Africa had the highest costs of sending remittances home in the last quarter of 2014, at 11.5% of a base $200, against an average global rate of 8%.
Nowhere was this more expensive than in sending money from South Africa to Zambia, Malawi, Botswana and Mozambique, the bank noted.
Essentially, migrants from African countries, already targeted based on wrong perceptions, are also finding it difficult to send back home the money that could uplift their struggling families, and offer them a path out of South Africa. It could be argued that because migrants can’t send their earnings out easily and cheaply, they are “forced” by government to stay to benefit from the fruits of their labour.
According to the study, South Africa also forms part of a bloc of African countries that are highly dependent on remittances which form 1% of its imports, suggesting a double standard of its shabby treatment treatment of migrants.
However, this African average has fallen from 12.6% in the fourth quarter of 2013, but it is still about double the cost of sending money home to the South Asia Region (ironically mainly Bangladesh, India and Pakistan, who are also resident in South Africa).
Tougher for Africans
So it is essentially easier and cheaper for non-African migrants to send money home from South Africa, than it is for Africans.
The study adds that remittances can be leveraged to raise billions of dollars in development financing, helping both South Africa and other African countries lift millions out of poverty. So far the South African economy has been the notable footnote to the Africa Rising view, consistently recording among the lowest growth rates of the sub-Saharan Africa countries.
The bank notes technology can help lower the costs of sending money home thus raising living levels, including through online and mobile money transfer systems, but adds that over-regulation due to money laundering concerns has slowed down up-take.
On a more positive note, sub-Saharan Africa still leads other world regions in the take up of mobile money services, with 130 live mobile money services.