Media365
South Africa’s growing wave of anti-migrant protests is emerging as more than just a social flashpoint. Economists say the campaign against foreign workers could inflict lasting damage on the country’s fragile economy by worsening labour shortages, disrupting businesses and denting economic growth.
Public anger over high unemployment, rising crime and years of sluggish economic expansion has fuelled anti-migrant sentiment across the country. The movement culminated in a nationwide march on June 30, prompting fears of violence and pushing thousands of African migrants to leave South Africa.
Experts caution that while the protests are aimed at protecting local jobs, they could instead hurt industries that have long depended on migrant labour, including agriculture, construction, hospitality, transport, retail and the informal sector.
According to United Nations data, around 2.6 million migrants were living in South Africa in 2024, accounting for nearly 5 per cent of the country’s population. Estimates by the OECD and the International Labour Organization (ILO) suggest migrants contribute roughly 9 per cent to South Africa’s gross domestic product (GDP).
Economists argue that migrant workers often fill vacancies that are difficult to staff and many also create businesses that employ South Africans, boosting competition and consumer choice.
The impact of the protests is already being felt in the retail sector. Foreign-owned spaza shops—small neighbourhood convenience stores that form the backbone of South Africa’s informal economy—have faced disruptions. Shoprite Group’s Sixty60 grocery delivery service also reported operational challenges, with company data showing that fewer than a quarter of its delivery drivers are South African.
The protests come at a difficult time for South Africa’s economy. The World Bank recently lowered its 2026 economic growth forecast for the country to 1 per cent, while the unemployment rate remains close to one-third of the workforce, leaving more than 8 million people jobless.
However, research by the ILO indicates that higher participation of migrants in the labour force is associated with increased employment opportunities for South African-born workers, challenging the perception that migrants take away local jobs.
Analysts also warn that prolonged protests could trigger broader economic disruptions through looting, supply chain interruptions and business closures, adding fresh uncertainty for investors.
While financial markets have so far remained relatively calm, investors say the protests have introduced a new social and economic risk for Africa’s largest industrial economy.
The consequences could also spill beyond South Africa’s borders. As the region’s biggest destination for migrant workers, the country is a major source of remittances for neighbouring economies. A joint report by FinMark Trust and the South African Reserve Bank found that remittance outflows more than tripled between 2016 and 2024 to over 19 billion rand ($1.16 billion), with Zimbabwe, Lesotho, Malawi and Mozambique receiving the bulk of the transfers.
