South Africa shooting itself in the foot

 ·22 Jun 2025

South Africa’s recently approved National Labour Migration Policy (NLMP) White Paper and Employment Services Amendment Bill (ESAB) have raised concerns that the country may be shooting itself in the foot.

Experts have warned that the legislation,  designed to limit the employment of foreign nationals, may not only harm foreign workers but also undermine South Africa’s economic interests.

At the end of May 2025, Cabinet announced that it had approved the National Labour Migration Policy (NLMP) 2025 White Paper and the Employment Services Amendment Bill, 2021 (ESAB) for implementation and submission to Parliament. 

“The NLMP and ESAB have been under consideration for several years now and introduce significant changes to the employment of foreign nationals in South Africa,” Cliffe Dekker Hofmeyr (CDH) explained

The firm noted that these changes aim to balance the need for economic growth and skills development while prioritising employment opportunities for South African citizens, permanent residents, and refugees.

The policy introduces strict controls on the employment of foreign nationals. Among the most notable changes are the introduction of quotas in key economic sectors such as agriculture, hospitality, tourism, and construction. 

These quotas will determine the maximum number of foreign nationals that employers can hire and will be set by the Minister of Employment and Labour following consultations and public input. 

Employers may only exceed the quotas if the job requires critical skills or if they receive a special exemption from the Minister.

CDH cautioned employers to start preparing now. “Employers operating in the identified sectors should prepare for the introduction of sectoral quotas by reviewing their current workforce composition and recruitment practices,” the firm said. 

The requirements are extensive. Employers must verify that no South African citizen can do the job before hiring a foreign worker. Non-compliance could lead to fines of up to R100,000 and other penalties.

Speaking with Newzroom Afrika, Professor Loren Landau, an expert in migration and development at the University of Oxford, believes these restrictions could have serious unintended consequences. 

“There would definitely be risks for immigrants if they’re made even more illegal, let’s say, or driven further underground,” he said. “Those are risks about being attacked by the police or by their neighbours if they’re seen as working.”

The legislation could hurt the economy

Professor Loren Landau

Beyond these social tensions, Landau is worried about broader labour market implications. He said the policy could unintentionally fuel the informal economy and erode working conditions for everyone. 

“It will probably drive the hiring of people illegally or outside of the legal sector, which might hurt the rights of all workers. This could result in further erosion of labour conditions not just for migrants but for South Africans as well.”

While the policy is politically popular, addressing frustration over high unemployment and perceptions that migrants take jobs from locals, Landau said it risks alienating the very investors South Africa needs. 

“Large companies, like BMW and Mercedes, have said they won’t invest further in South Africa, creating more South African jobs,” he said. “This is because it’s too difficult for them to get the engineers or the highly skilled people they need.” 

He added that even when foreign professionals are approved, they face severe delays and inefficiencies at the Department of Home Affairs. “If that’s the case, this definitely is an own goal, one that is working against South Africa’s interests.”

Landau added that it contradicts the African Union’s long-term vision of regional integration, including free movement and a continent-wide passport. 

“It is out of step to some degree with the African Union’s goals, but it is an important nod to some of the politics in the country, which are anti-immigration.”

CDH warned employers to monitor the legislative process and begin reviewing their employment policies and practices in anticipation of the new requirements in the employment of foreign nationals.

Whether the policy delivers the promised benefits will depend heavily on how it is implemented. Landau stressed that implementation, especially the regulatory framework and permitting systems, will determine whether the policy is effective or damaging. 

“The truth and how it works out will be in the regulations and permitting processes,” he said. Landau believes the country may benefit more in the long term by embracing its neighbours. 

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