Tuesday, March 14, 2017

South Africa's Immigration

After a wave of anti-immigrant protests, South Africa's Institute for Race Relations has released a report highlighting immigrants' entrepreneurial skills and their sizable contribution to the economy. When xenophobic violence erupted in 2008, in 2015 and earlier this year, it was accompanied by accusations that foreign nationals were taking jobs away from South Africans. The IRR's report shows, however, that that most of the immigrants create their own employment. In addition, the premises for the small convenience stores that immigrants run are generally owned by South Africans - landlords who receive rent. Not all immigrants opt for self-employment. Those looking for jobs have often been able to find them in sectors shunned by South Africans because of poor wages.  But the report says that even those immigrants have been able to improve their situation despite meager incomes. South Africa's immigrants, the report concludes, seem to have adapted well to life in a country with 27 percent unemployment. Unemployment among immigrants stands at around 14.6 percent, which roughly a half to a third of the local rate for the whole population.

IRR's research found that foreign nationals from countries such as Somalia, Pakistan and Bangladesh start up their own businesses on arrival in South Africa. They range from small convenience stores to wholesalers.  Eighty percent of the convenience stores, known as spaza shops, are now owned by foreign nationals. The foreign entrepreneurs keep their profit margins low giving them an edge over the competition. The report says the majority started 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. 

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