South African immigration policy strangles flow of skills
Perhaps one shouldn’t read too much into the fact that the CEO of RwandAir was unable to get a visa to visit SA last month to attend the launch of the airline’s new flight route from Kigali to Cape Town. Mistakes happen.
But what about the fact that a group of about 30 travel agents from Ethiopia cancelled their mission to Cape Town in April because of difficulties obtaining visas, or the fact that Wesgro CEO Tim Harris says he spends 80% of his time wrangling with the Department of Home Affairs to expedite investors’ access to the Western Cape?
“I think our immigration policy doesn’t make it easy enough to bring in the skills our companies need to grow,” says Harris. “If there is an ideological issue it’s a failure to recognise that skilled immigrants are significant net job creators.”
Economists like to say: show me a country that is battling to export and I will show you a country with a confused immigration policy.
SA’s exports are grossly underperforming. In the 2016 calendar year, SA’s export growth by volume was 1%. In 2017 it fell to -0.1% and in the first quarter of 2018 growth was just 0.2% year on year. This dire performance is puzzling since it has occurred despite synchronised global growth and a relatively weak rand.
One of the chief constraints on economic activity in SA is the shortage of skills. This is a result of decades of below-par schooling for the bulk of the population and an ineffectual vocational training system.
Though SA has made strides in increasing the number of people with tertiary qualifications, only about 10% of the workforce was thus qualified in 2011, compared with almost 40% on average in other Group of 20 countries. We have a significant amount of catching up to do.
The state’s critical skills list includes just about every type of educator, engineer, technologist and health professional imaginable. But even basic skills are also deemed critically short. SA needs more qualified painters, plumbers, welders, boiler makers, mechanics and truck drivers.
Information technology (IT) personnel, accountants and engineers are the top three categories most in demand in SA. Strange then that Singapore, Germany, Ireland, the US and the UK have all sent expeditions to India to poach IT engineers but SA has not.
The UK even has a special programme to attract South African nurses at a time when SA has its own critical shortage of health workers.
The question is why SA, in tandem with fixing the education system, isn’t actively recruiting skilled people from abroad, let alone making it harder for them to enter the country. Study after study has shown that skilled and entrepreneurial migrants create jobs for locals.
This was reinforced last month by the UN Conference on Trade and Development’s 2018 Economic Development in Africa Report.
It found that far from being a drain on host countries’ resources, the net impact of immigrants is positive. Not only do migrants bring their skills with them, they also spend about 85% of their incomes in their new destinations, contributing to development through taxes and consumption.
The report puts the contribution of international migrants to GDP at 19% in Ivory Coast (2008), 13% in Rwanda (2012) and 9% in SA (2011).
In short, instead of putting unnecessary obstacles in their way, SA should be welcoming all skilled migrants, not just those that fit the gaps on the critical skills list.
“Allowing skilled immigration is the easiest $500 bill lying on the ground,” said Harvard professor Ricardo Haussman last year when asked what would be the quickest way to boost SA’s economic growth rate.
That $500 note is still lying there, waiting for South African policy makers to pick it up.