Middle-class South Africans are looking for a way out
A survey conducted by online market research group InfoQuest shows that one in five working South Africans is either actively making inquiries about leaving the country or are already on their way out the door.
The survey sampled a relatively small grouping of 300 working South Africans, where 5% of the respondents said they have already applied for residency in another country, have been accepted and will emigrate soon.
Extrapolating the data onto the working population of 15 million people, the group said that this represents potentially thousands of skilled workers who are moving abroad.
A further 14% of the survey respondents said they are seriously thinking about emigrating and have made inquiries or submitted applications – while one in three say that they have thought about emigrating but have not taken any action yet.
Around half the respondents said they are happy to remain in the country and have not thought about leaving.
What’s notable about the survey responses is the profile of those who are actively looking to leave. This group is likely to be made up of young families, earning between R20,000 and R40,000 a month – the earning bracket considered to be the middle class in South Africa, according to FNB.
“Also, those currently employed part-time in South Africa are more likely to leave, probably spurred on by their need for more secure job opportunities,” InfoQuest said.
“There is no doubt that the emigration rate is a real concern for South Africa, and sadly, the economic pressures, as well as some of the other infrastructure challenges such as load shedding, are making it difficult to promote positivity currently within our country.”
The survey findings align with several other data pointing to the same trend.
A survey conducted by the Social Research Foundation earlier this month – drawing responses from over 3,200 registered voters – found that over half of the country’s top earners and university graduates are considering emigration.
The survey found that 53% of university graduates and 43% of those who earned more than R20,000 a month – again, within the middle class – may leave the country. Overall, 23% of those surveyed said they may look to live in another country.
While the majority of the respondents in both surveys show no interest in leaving, the sizeable portions looking for a way out of the country exacerbate the growing skills and wealth crisis in the country.
Brain drain
The South African government does not country track the outflow migration of South African citizens. However, migration data from the biggest destination countries locals move to shows that tens of thousands of South Africans have left the country over the last year.
Within just the first half of 2022, between January and May, 11,300 South Africans have had their residency applications approved for processing in New Zealand. Stats published by the UK Home Office show that between Q1 2020 and Q3 2021, 5,845 citizenship grants were awarded to South Africans relocating to the country.
At least 2,230 have left for Australia, and 652 South Africans have obtained resident status in the USA. Canada, meanwhile, noted that 5,000 South Africans enter the Canadian immigration system for processing every year.
The country is losing vital skills – including critical skills it is desperately trying to import, including nurses and specialist doctors.
Finance experts, meanwhile, are sounding the alarm about how emigration is impacting the country’s finances, saying that the government now faces a shrinking tax base as a result.
Load shedding, political instability, poor policy decisions, high crime, and growing frustrations over government corruption and poor service delivery are all push factors underpinning the decision to leave.
For wealthy South Africans, bleak prospects for the economy and an ever-encroaching taxman coming after assets and other forms of wealth are also big motivators to make an exit.
Dani van Vuuren, business development consultant at Sovereign Trust, said in a note this past week that the country faces the prospect of an accelerated ‘brain drain’ as skilled and entrepreneurial South Africans look to establish themselves in countries that are more politically and economically stable while offering a more predictable tax regime.
Recent threats of a wealth tax could even drive younger South Africans to consider their options after graduating, where they would attempt to work and earn in other countries where tax and crime rates are lower, and economic growth prospects better, she said.
Van Vuuren said that since the idea of a wealth tax was mooted, her company had already seen an uptick in the number of inquiries from citizens considering other jurisdictions.
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