Recent news reports indicate an ever-weakening South African economy, shocking unemployment levels and a worrying skills exodus. The taxpayer base is effectively being eroded as the very citizens qualified to build the economy leave the country in droves.
While South Africa loses skills, business capital and jobs as a result, other countries are gaining — partly thanks to their initiatives to offer “golden visas”, in which applicants must invest heavily into their destination country and are given residency or citizenship in return. These visas, offered by more than 20 countries, require investments from R2-million to about R20-million and are reported to have grossed more than €25-billion in Europe alone during the past 10 years.
Applicants often have to invest in both property and some form of national development fund for a minimum period of time, bringing significant revenues into the destination country. New residents or citizens also bring with them spending power, skills, tax revenues and the probable creation of jobs in their new home country.
Surprisingly, South Africa not only does not tap into this potential pot of gold, it actively closes its borders to foreigners keen to bring investment, skills and business capability into the country.
South Africa appears to regard all foreigners with suspicion, making visa, residency and citizenship applications a complex nightmare that deters foreigners, despite the fact that many would like to invest and live in South Africa. I receive numerous inquiries from wealthy individuals looking to buy property for leisure use, and from skilled individuals wanting to work or open businesses in the country. For each foreigner investing in a holiday home, wine farm or safari lodge, and for every skilled entrepreneur setting up shop in South Africa, we see a multitude of jobs being created and much-needed tax revenue generated.
Yet South Africa persists in locking down its borders. The department of home affairs’ processes are beset with delays. Its officials enforce internal policies over the laws of the country, and wrongful application refusals result in lengthy and expensive legal battles for applicants. Compounding these problems, the critical skills list looks set to omit designations such as corporate general managers and financial investment advisers, excluding applicants highly skilled in the fields of business development and finance.
De Saude Attorneys was among members of the multisectoral task team that recently made recommendations at a meeting with the acting director general of the department of home affairs and other officials on the question of scarce skills.
Our recommendations were well received. But, several of our recommendations to boost foreign investment would require buy-in from other government departments. For instance, our recommendation on reducing the R5-million foreign operating capital required to start a business would require a decision by the department of trade and industry.
But the success of any new law — or efforts to attract foreign investment — will depend on how they are implemented.
This is where the real challenge lies: home affairs officials are well-known for their tendency to delay, summarily refuse applications or to make decisions not aligned with the letter and intent of the relevant laws. They need to act with due respect for law, for their constitutional obligations, for immigration jurisprudence, for the rights of people and in the best interests of the country, to attract foreign skills and investment and support the economic growth objectives of the government.
Stefanie de Saude Darbandi is the immigration and citizenship law specialist at De Saude Attorneys