South Africa’s anti-migrant protests raise fears of economic damage

A surge in anti-migrant protests in South Africa could damage businesses, deepen labour shortages and disrupt economies across the wider region, economists have warned.

Public anger over unemployment, crime and years of weak economic growth has fuelled growing hostility towards foreign nationals.

The movement culminated in a nationwide march on 30 June. Although most demonstrations were peaceful, concerns about possible violence have prompted thousands of African migrants to leave the country.

Economists say their departure could have serious consequences for sectors that rely heavily on foreign workers, including farming, construction, hospitality, retail, transport and delivery services.

“Migrants typically find work in sectors where vacancies are difficult to fill,” said Mpho Lenoke, a lecturer at South Africa’s North-West University.

Foreign workers also play a significant role in the informal economy, where they operate shops, provide services and, in some cases, establish businesses that employ South African citizens.

According to United Nations data, about 2.6 million migrants were living in South Africa in 2024, representing roughly 5% of the population.

Recent estimates of their contribution to the economy are limited. However, an earlier study by the Organisation for Economic Co-operation and Development and the International Labour Organization estimated that migrants accounted for about 9% of South Africa’s gross domestic product.

The estimate, published in 2018, was based on economic modelling using data from 2010.

“Many foreign nationals are starting businesses that employ South Africans and bring competition, which is good for consumers,” Mr Lenoke said.

“International experience suggests that restrictions on migrant labour often have unintended economic consequences.”

Businesses face disruption

The protests have already affected parts of the retail and delivery sectors.

Foreign-owned spaza shops — small convenience stores often operating from homes, garages, stalls or shipping containers — are an important part of South Africa’s informal economy.

They support networks of wholesalers, landlords and local workers, particularly in townships and lower-income communities.

Sixty60, the grocery delivery service owned by Shoprite Group, Africa’s largest food retailer, experienced disruption during the latest demonstrations.

Company figures indicated that fewer than a quarter of its delivery drivers were South African citizens.

Analysts warn that prolonged unrest could also lead to business closures, supply-chain disruption and job losses.

“When tensions escalate, supply chains are disrupted, jobs are lost, and access to goods and services is curtailed,” said Susanna Deetlefs of the conflict-monitoring organisation ACLED.

Anti-migrant incidents recorded during the first half of 2026 were on course to exceed the total reported during the whole of 2025.

Anger over unemployment

South Africa has struggled with weak economic growth and persistently high unemployment.

Statistics South Africa reported that almost one-third of the workforce was unemployed during the first quarter of the year, leaving about 8.1 million people without jobs.

The World Bank has also lowered its forecast for South African economic growth in 2026 to 1%, down from an earlier estimate of 1.4%.

These pressures have contributed to claims that migrants are taking jobs and placing additional strain on public services.

However, research by the International Labour Organization has challenged the assumption that migrant workers reduce opportunities for South Africans.

A study using labour-force survey data found that higher participation by immigrants in the workforce was associated with increased employment opportunities for South African-born workers.

Concern among investors

Investors have so far reacted cautiously rather than dramatically, but some say the protests have introduced another risk to South Africa’s economic outlook.

“It is a significant social problem in South Africa that investors keep hearing about, but they actually haven’t seen an actual real-life impact of it,” said Kaan Nazli, an emerging-markets debt portfolio manager at Neuberger Berman.

“Now, with these protests, this is a risk.”

The potential consequences extend beyond South Africa’s borders.

The country is the largest host of working-age migrants in southern Africa and the region’s main source of money sent home by migrant workers.

A report by FinMark Trust and the South African Reserve Bank found that remittance outflows more than tripled between 2016 and 2024, reaching more than 19bn rand — about $1.16bn — in 2024.

Almost 90% of transfers to southern African countries were sent to Lesotho, Malawi, Mozambique and Zimbabwe.

Zimbabwe alone received more than 60% of the total.

Economists warn that a large-scale departure of migrant workers could therefore affect not only South African businesses, but also millions of families across the region who depend on income earned in the country.