Standstill on work visas stymies jobs
There is no indication from the government on the new, but withdrawn, work visa regulations, says Consumer Goods Council CEO
Zinhle Tyikwe, CEO of the Consumer Goods Council of SA, says ongoing uncertainty about desperately needed new skilled work visa regulations shows the government is not serious about working with business.
“It reinforces our sense of a government that doesn’t want to consult. It shows us that the consultation process is just a tick box exercise. Government has not been negotiating with business about these new regulations in good faith. Our submissions were not taken into account.”
The Consumer Goods Council represents the entire consumer goods industry in the country. Its members include multinational companies which have been battling for years to recruit critical skills into South Africa.
In his review of the situation in 2023, former department of home affairs director-general Mavuso Msimang reported a backlog of more than 74,000 work visa applications. Between 2014 and 2021 the department rejected more than half the applications for skilled work visas.
Then it got even worse when South African high commissions and embassies around the world were instructed to stop issuing work visas and send applications to Pretoria.
Applicants had to submit X-rays and police clearance certificates from every country they had worked in. Their companies had to submit plans to the department of employment & labour detailing how they would localise the critical skills they wanted to bring in.
Pleas by the Consumer Goods Council to speed up the process fell on deaf ears.
“It was a nightmare”, says Tyikwe. Multinationals had to put expansion plans on hold or scrap them.
The bungled gazetting of long-awaited new regulations in March which had to be withdrawn because of inadequate consultation reinforces the belief that the government is out of touch with the needs of a modern economy, she says.
“The multinationals we represent work in a highly competitive, global environment. Not being able to bring the skills they need as and when they need them is a major operational constraint.”
It’s costing South Africa investment in manufacturing plants, economic growth and jobs.
“Competing countries are opening up opportunities for foreign direct investment and we are not.”
The department of employment & labour still thinks that by not allowing skills to come to South Africa they’re helping to create skills inside the country.
Trying to explain to the department that “this is not how things work in the real world of globally competitive business” remains one of the Consumer Goods Council’s biggest challenges, she says.
“Countries in Africa are rolling out the red carpet for investors so that they can create employment, improve skills and eliminate inequality and poverty.”
By contrast, multinationals in South Africa are saying the country is “not futurefit with regard to policy and regulations. They don’t know what to expect so they cannot plan long-term investment and strategies”.
The withdrawn new regulations are an improvement with some of the lengthy requirements streamlined or withdrawn.
But even if the regulations that are finally published are closer to what her members and the economy require, the big challenge will be implementing them.
“We’re waiting for the regulations to be reissued so we can make sure we all understand, and our members understand, what needs to be done.”
There is still a lot of confusion, and more delays seem inevitable, she says.
There is no indication from the government as to when the new, but withdrawn, regulations will be published.
“There is just so much uncertainty we’re dealing with, which means investors don’t know whether to invest and our members don’t know if they’ll achieve their economic prospects or even be sustainable.”
On top of all this is uncertainty about the elections in May. Will the new regulations be published before the elections? If not, will they be published after the elections?
“We’re not sure about any of this. We need to get clarity as soon as possible because the status quo of the work visas is not feasible for the industry.”
The consequences for investment, economic growth and job creation have been dire, she says.
“Our biggest challenge is that the government does not seem to take business seriously as its partner in this process.”
Consumer Goods Council members employ 2.5-million people, making them the second-largest employers in the country after the government. They contribute 20% of the country’s GDP.
“We are a partner to government for job creation and economic growth, and it’s important that the government realises this and sees us in that light.”
The government’s consistent failure to consult properly over its anti-growth work visa regulations does not convey this message.
“How do you put policies and regulations into an economy that are not suitable for economic growth, while at the same time you’re saying you want employment, you want to eliminate inequality and poverty in the country. But you’re not creating policy instruments that are geared to do that?”
In his state of the nation address in February 2022 President Cyril Ramaphosa announced the creation of an anti-red tape task force in the presidency under highly rated business executive Sipho Nkosi.
“We as an industry wrote a 40-page document outlining policies and regulations which in our view created red tape ... making it difficult for our members to operate and trade, which we wanted this task force to look into as a matter of urgency.”
Two-and-a-half years later they were finally due to meet Nkosi this week “to talk about the policies and regulations that are negatively impacting economic and employment opportunities”.
The delays in securing the meeting confirm for her “that we are not seen as a strategic partner by government”.
The bungled publication of the longawaited new work visa regulations and lack of tangible achievements by the anti-redtape task force make her wonder how well the government understands the economic consequences.
“When the president acknowledged that the regulatory environment was hindering economic growth and employment and announced the appointment of Nkosi, we were all excited to see that at last there was going to be progress in that environment.
“More than two years later we haven’t seen any movement.”
Applicants for work visas in South Africa had to submit X-rays and police clearance certificates from every country they had worked in