By Mireille Wenger, Provincial Minister of Finance and Economic Opportunities
In almost every interaction I have with businesses in the Western Cape, a topic consistently raised as a key obstacle to attracting investment and expanding existing businesses is the broken South African visa regime.
To facilitate foreign investment, companies need to be able to easily access South Africa. Those who apply for critical skills visas typically contribute to the development of new and existing sectors, in line with international best practice or by supporting new industries through skills development. This is why investment and critical skills visas are crucial enablers of economic growth and job creation.
To gather more specific information on the challenges experienced by businesses regarding this issue, the Western Cape Government Department of Economic Development and Tourism conducted a survey at the end of November 2022.
In total, 133 responses were received from businesses in sectors including ICT/Technology/Software services, Tourism, Finance and business services, Manufacturing, Agriculture/Agri-processing, and Business Process Outsourcing.
A critical finding of this survey was that 78% of respondents rated the immigration application system in South Africa as very poor compared to other countries where the respondents have operations.
Another deeply concerning finding was that 26% of businesses moved their operations overseas, costing countless jobs in South Africa, as a result of the serious challenges they faced with the national visa system.
Some of the other key results include:
- The main reason respondents required a visa was for work purposes, to employ critical skills that are not available in South Africa, and because their businesses need to employ foreign staff.
- The top three visas applied for:
- Work visa (19%)
- Critical skills work visa (18%)
- Immigration visa (15%)
- The top three complaints/issues with the visa application system:
- Delays in the approval process (17%)
- Applicants not receiving feedback on their applications (14%)
- Lack of an escalation mechanism for complaints (10%)
- The impact on the businesses affected by the visa application system includes:
- Time delays (25%)
- Cost implications (22%)
- Inability to hire the required skilled workers (21%)
- The top three measures taken by the respondents to address the challenges experienced with the visa application process were:
- Moving operations abroad (26%)
- Employing fewer staff (17%)
- Scaling down operations (17%)
The fact is that the current visa regime is a significant deterrent to investment and the expansion of existing businesses, costing jobs and economic growth at a time when we can ill-afford to lose either.
While the recent commitments from President Cyril Ramaphosa to address the serious issues with the visa system were welcomed, words no longer count. Decisive action is required along with timelines to address the well-known challenges.