How the rush to leave South Africa is starting to hurt business

 ·22 Aug 2017

Economic and political uncertainty under the current regime, along with unemployment at its highest point in more than a decade, is fueling an exit by South Africa’s educated middle class.

Nigel Barnes, managing partner at citizenship planning consultancy, Henley & Partners, and other emigration experts have highlighted a massive rise in inquiries about emigration from South Africans in 2017.

“I think that concerns over the future growth and development of South Africa, and uncertainty about the sustainability of sectors, such as education, is finally driving South Africans to assess their alternatives in earnest.

“In short, they are now acting on their concerns, rather than just voicing them among family and friends,” Barnes said.

And this exodus has not gone unnoticed by the government. In May, BusinessTech reported on a new Department of Home Affairs white paper, which would compel South Africans who plan to be out of the country for longer than three months to register with the government.

The register was reportedly meant to act as a means of keeping track of South Africans abroad, and curbing the high emigration rate.

On Friday, 28 July, Home Affairs officially gazetted the white Paper for public comment, confirming the original reports.

This marks the first time Home Affairs has included emigration control in official policy, something it directly attributes to the high number of skilled workers and taxes leaving the country.

It now appears that the rising emigration rate is beginning to take its toll on business. In a financial statement on Monday, Advtech, a listed private education provider, said: “The difficult economic climate and unsettled socio-political environment had a more significant effect on enrolment numbers than had been anticipated.

“We have seen a consistent rise in the number of families emigrating and this trend had a particularly negative effect on enrolled numbers as we lose students in grades where it is difficult to replace,” it said.

Advtech’s schools division consists of 90 (2016: 78) schools, across 47 campuses under the following brands: Abbotts College, Advtech Academies, Centurus Colleges, Crawford Schools, Junior Colleges, Maravest Group and Trinityhouse.

Speaking to The Citizen, social anthropology expert, professor Leslie Bank said that the country’s current middle-class is too small and needs to increase by “at least 20% to 30%” if economic growth is to become sustainable.

Read: South Africa’s white population shrinks even further in 2017

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