South African Businesses Struggle as Foreign Workers and Traders Leave

Recent xenophobic protests in South Africa are having an economic impact, with some businesses struggling after foreign workers and traders left the country.

The situation has been particularly evident in Newcastle, KwaZulu-Natal, where clothing manufacturers have reported losing significant numbers of migrant workers following anti-immigrant protests. Factory owners say the departures have left some production lines short of workers and raised concerns about possible closures.

The protests were driven in part by demands that undocumented migrants leave South Africa, amid claims by anti-immigration groups that foreigners are taking jobs from South Africans. However, employers and labour analysts have disputed the idea that migrant workers can simply be replaced, pointing to skills shortages and the unattractiveness of some low-paid and physically demanding jobs to local workers.

Reuters reported that three clothing factories in Newcastle had lost between 12 and 19 per cent of their workforces during the protests. One factory owner warned that the combined effect of labour shortages and declining orders could push businesses towards closure.

The wider impact extends beyond factories. South Africa’s spaza-shop economy has also been affected, with many foreign-owned small businesses targeted during recent anti-migrant actions. The New Humanitarian reported that the country’s large network of spaza shops plays an important role in neighbourhood economies, providing employment and access to everyday goods.

The developments have created an uncomfortable economic reality: campaigns demanding the removal of foreign workers and business owners can also disrupt businesses and supply chains that rely on their labour and participation.

While reports of South Africans wanting foreign business owners and workers to return have circulated, the broader evidence is more nuanced. The economic difficulties are documented, but it would be misleading to suggest that South Africans as a whole are demanding the return of foreigners.