Businesses in South Africa are also ’emigrating’
Consistent visa issues in South Africa are sending some fed-up businesses out the door as they look to set up in other countries to escape the red tape, delays and general chaos.
This is one of the worrying findings of a new survey conducted by the Western Cape government, trying to gauge the views of businesses in the province who have been affected by multiple delays and red tape attached to visa processes.
The chaos in South Africa’s visa regime is well documented, with the Department of Home Affairs itself acknowledging and committing to resolving the issues.
Earlier this year, the department admitted to having a backlog of visas stretching over 60,000, with intentions to clear it by the middle of 2024.
In the meantime, however, businesses that are struggling to find the necessary skills locally for their operations and have turned to foreign job seekers to close the gaps are now struggling to get the necessary visas to do so.
According to Western Cape Premier Alan Winde, businesses in the province have consistently raised the visa chaos as a key obstacle to attracting investment and for expanding existing operations.
For some, the frustrations have grown to the point that they have opted to move their operations abroad.
The provincial government ran a survey which drew 133 responses from local businesses. Of these businesses, 26% indicated they had moved their main operations overseas to counter the skills shortage.
However, 34% had to scale down their operations or cut their hiring plans.
The main reason respondents required a visa was for work purposes, to employ critical skills that are not available in South Africa, and because their businesses need to employ foreign staff.
A critical finding of this survey was that 78% of respondents rated the immigration application system in South Africa as very poor compared to other countries where they have operations.
The top three visas applied for:
- Work visa (19%)
- Critical skills work visa (18%)
- Immigration visa (15%)
The top three complaints/issues with the visa application system:
- Delays in the approval process (17%)
- Applicants not receiving feedback on their applications (14%)
- Lack of an escalation mechanism for complaints (10%)
The impact on the businesses affected by the visa application system include:
- Time delays (25%)
- Cost implications (22%)
- Inability to hire the required skilled workers (21%)
The top three measures taken by the respondents to address the challenges experienced with the visa application process were:
- Moving operations abroad (26%)
- Employing fewer staff (17%)
- Scaling down operations (17%)
According to Winde, to facilitate foreign investment, companies need to be able to easily access South Africa and those who apply for critical skills visas typically help to develop new and existing sectors, in line with international best practice or by helping to new industries through skills development.
“The fact is that the current visa regime is a significant deterrent to investment and the expansion of existing businesses, costing jobs and economic growth right at a time when we can ill-afford to lose either,” he said.
Changes are coming
The Department of Home Affairs has committed to restructuring and changing South Africa’s visa regime – but the process is not happening with any degree of urgency.
In its annual performance plan for 2023/24, the South African Department of Home Affairs announced its intention to introduce new visa categories.
Home Affairs Minister Aaron Motsoaledi stated that the department is exploring the possibility of start-up visas and remote working visas. Previously, the minister had suggested that the regulatory framework for these visas did not exist and that no plans were in place to change this.
However, these visas have been highlighted in President Cyril Ramaphosa’s State of the Nation Address for the past two years as part of an effort to attract skilled labour to South Africa.
A comprehensive report on the review of the work visa system was recently presented to the President by the Operation Vulindlela Team, led by Mavuso Msimang, the former Director-General of Home Affairs. The report includes recommendations for new visa categories that could facilitate economic growth.
The Department of Home Affairs has drafted an implementation plan based on these recommendations.
The department has confirmed its intention to define the specific requirements for remote work visas and start-up visas within the next three months, aiming to complete this process by the end of June. To achieve this, the department will need to amend regulations 11 and 14 of the Immigration Regulations within the same timeframe.
Additionally, a consultation document (green paper) is expected to be finalized by the end of the first quarter of the financial year, with a whitepaper to be submitted to the cabinet by the end of the fourth quarter, which is April 2024. These documents will outline the proposed visa categories and the necessary procedures and regulations associated with them.
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