Improving immigration policy can assist local economy

Source: BIZCOMMUNITY, 09/06/2016

In April this year in his address to the SA-Iranian Business Forum in
Tehran, South African President Jacob Zuma stated that the country was
open for business. The same concept formed an integral part for the
State of the Nation address he delivered in parliament in Cape Town on
the 11th February 2016.


In his speech he said that the country remains an attractive
investment destination. He also pressed that it was imperative to
continue to market the country as a preferred destination for
investments. Positioning South Africa as a prime investment
destination that is open for business has been the President`s mantra
since he started his term.


Is SA really open for business?

Despite the strong message, the question that remains is whether or
not South Africa is really open for business? The level of openness,
particularly for foreign direct investment (FDI) into our country,
needs to be seriously evaluated.

This is according to Gary Eisenberg, immigration lawyer at Eisenberg &
Associates, who says that South Africa is at a tipping point. "Besides
the question of South Africa`s state of limbo with international
rating agencies, it is doing absolutely nothing in practical terms to
attract foreign direct investment."

Addressing the challenges of making SA open for business, President
Jacob Zuma said earlier this year that this requires a common
narrative from all of us as business, labour and government.
"Government is developing a One Stop Shop/Invest SA initiative to
signal that South Africa is truly open for business. We will
fast-track the implementation of this service, in partnership with the
private sector. Such an initiative requires that government removes
the red tape and reviews any legislative and regulatory blockages,"
said President Zuma.
Policy review

In order for this to become a reality, rather than just politicking, a
review of South Africa`s immigration policy is imperative, explains
Eisenberg.

Eisenberg says that South African`s low economic growth is partly
reflected by the lack of an immigration policy. "At a recent address
at the Cape Town Press Club, it was clear that the Minister of Home
Affairs, Malusi Gigaba, was silent on immigration policy that
recognises the essential importance of foreigners and their
contribution to making South Africa a better and more competitive
country."

Professor Ian Goldin, once the managing director of the Development
Bank of Southern Africa and now professor of globalisation at Oxford
University, concludes that the diversity that foreigners brings to an
economy serves as a catalyst that spurs creativity and performance, in
business, academia, medicine, science, politics, food, culture,
entertainment and sports. In writing for the World Economic Forum,
Professor Goldin said that "migration has always been one of the most
important drivers of human progress and dynamism…and in the age of
globalisation, barriers to migration pose a threat to economic growth
and sustainability."

Eisenberg & Associates recently conducted a poll on Facebook, asking
respondents whether South Africa really was open for business.
According to Eisenberg, the results and perceptions revealed were
unsurprising.

With more than 9,000 online engagements, the Eisenberg and Associates
Facebook poll indicated that there was a strong perception that the
South African government was not open for business and that the
respondents believed that the country was undergoing either a form of
state capture, or an increased level of cronyism.
Visa requirements

In a report published by the African Development Bank (AFDB) on visa
openness on the continent – which focused on advocating free movement
of labour, capital, goods and services to promote economic
development, it found that African citizens need visas to travel to
more than half (55%) of the continent`s countries.

Of the 20 most 'visa-open' countries, 75% are in either East or West
Africa. None are in Central Africa while the Seychelles leads the way,
with visa-free access for all nationalities. Western Sahara is the
least open, requiring all visitors from African countries to acquire a
visa prior to departure. Eisenberg points out that the AFDB report
ranks the Southern African region was one of the lowest for free
movement across borders. "Based on the results, the region only ranked
with a 51% rating on the AFDB barometer. Perceived support was even
lower, with only 32%."

The OECD`s restrictiveness index, which measures how open a country is
to FDI, places South Africa as one of the most open jurisdictions for
FDI in the world. Despite the global economic instability that emerged
since 2007, South Africa still managed to attract 24% of FDI projects
to the African continent. FDI accounts for 42% of GDP in South Africa
at present.

Eisenberg says that overall confidence in the economy is dropping
(both from a consumer and business perspective) – as is reported by
the OECD. "However, this can be countered with a stronger focus on FDI
and improved free movement into the country."

Eisenberg says that radical amendments to the Immigration Act in May
2014 have created unprecedented bureaucratic barriers to the inflow of
migrants, the very people government declares it is targeting. "Last
year some 51% of all temporary and permanent residence applications
submitted in South Africa were denied, mostly for reasons which are
nonsensical."

Rather than simply painting a picture of doom and gloom, Eisenberg
firmly believes that with improved regulations and immigration
processes, the South African economy can only benefit. "A mind shift
in the way South Africa views foreigners is essential. By introducing
a strong immigration policy that recognises the value that foreigners
can provide to our economy can only better our country," concludes
Eisenberg.