Tuesday 13 April 2021
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Immigrant Entrepreneurship: Contributing to Job Creation in South Africa

Immigrant Entrepreneurship: Contributing to Job Creation in South Africa


South Africa is ranked as the biggest economy in Africa, a position which has been greatly attributed to by her ability to attract foreign entrepreneur skills.

South Africa has attracted foreign talent over the years since its independence. Among some of the most popular foreigners to migrate to the rainbow nation are Nigerians, Somalis, and Zimbabweans.

These people have demonstrated great entrepreneurial flair in their own countries and it is no coincidence that the rise of South Africa occurred at a time when these migrants started to trickle into the rainbow nation.

In order, to understand how immigrant entrepreneurship is aiding South Africa’s development, it is imperative to first get to understand those factors which pull foreign talent to come to South Africa.

A stable financial sector is no doubt the biggest pull factor when it comes to migrating to South Africa. South Africa has managed to stand the tests of time over the years when its market was hit by the recession and when the Rand considerably crumbled against other currencies. As any business needs a conducive operating environment, South Africa’s stable financial sector provides the perfect environment.

Ease of doing business is another great pulling factor in South Africa. South Africa’s fiscal policy management is fairly stable. Taxes are relatively low in comparison with other African countries and they are kept at a constant. South Africa’s monetary policy is fairly stable also allowing businesses to remit huge profits without much regulation.

Socio-political stability ensures that South Africa is a safe environment to operate your business in. though social and political skirmishes do happen every now and then, they don’t necessarily affect the business environment.

South Africa legalised savings club popularly known as ‘stokvels’ as such it is easier for groups of people to raise capital.

Research has shown that small businesses are responsible for employing large numbers of workers. As such, small immigrant businesses which are in South Africa are playing a crucial role both in terms of tax payments and in recruiting a large portion of job seekers. Small immigrant businesses in South Africa are mostly concentrated in the clothing and fast food industries.

Contrary to popular belief, immigrant entrepreneurs in South Africa are not benefitting from South African jobs but rather they are generating more jobs for South Africans. In a research conducted by the Con Magazine South Africa in Cape Town, immigrant businesses have more local workers than foreign workers. Once a business has established itself, the major beneficiaries in terms of employment are local workers. Though this research was conducted in and around the Cape Town CBD, the results show the general trend in the whole of South Africa.

Immigrant businesses, especially those in the clothing industry, tend to focus more on exporting their products than in selling at the local market. By doing so, they are responsible for generating over a quarter in the $427 million gained by South Africa’s fashion industry in 2017 thus far according to

The flow of ideas between foreign business owners to locals is another huge benefit largely overlooked by many. As South Africans are exposed to increasingly new innovative ideas and business ventures, they will on their own establish and strive to compete with already established businesses. The ever increasing number of locally owned small, micro and medium enterprises (SMMEs) in all facets of the economy can be attributed to the prevalence of business minded foreigners.

Immigrant entrepreneurs are also essential in any environment as research shows that they are the one group which often times identifies a new niche market. It is difficult for many local entrepreneurs to identify opportunities in their backyard but for someone with little knowledge of the environment, one observation can reveal a problem which for him/her will provide a business opportunity.

Immigrant entrepreneurs also come up with new ways to serve customers while connecting markets between their host country and their homeland.