The business industry has called on the government to fast-track reforms in South Africa’s economic and industrial policy, including the visa regime, in a bid to boost intra-Africa trade and attract foreign direct investment and scarce skills.
This comes as business lobby group, the South African United Business Confederation (SAUBC) changed its name to the African United Business Confederation (AUBC) yesterday, to focus on promoting business unity and collaboration across the continent.
The AUBC represents more than 1.4 million businesses employing more than 6.5 million workers in 79 industry sector associations.
AUBC president George Sebulela said the organisation would position itself to be at the centre of enabling the African Continental Free Trade Area agreement.
The AfCFTA is the world’s largest free trade area, bringing together the 55 countries of the AU and eight Regional Economic Communities to create a single continental market with a population of about 1.3 billion people and a combined gross domestic product of approximately $ 3.4 trillion (R67 trillion).
Sebolela said recent trends indicated that developing economic regions were driving the growth in Africa trade and would continue to do so over the next 50 years.
“The easiest place to do business is Africa and the people who are doing business in Africa are not from South Africa, they are from Europe, Asia, the US,” Sebulela said.
“If we sit, we are not seen to be in the centre of unlocking these opportunities, and we are doomed, we should not even complain because the intellectual capital sits with us.”
In November 2022, the Western Cape Department of Economic Development and Tourism conducted a survey to gather information on the challenges experienced by businesses.
Western Cape MEC for Finance and Economic Opportunities Mireille Wenger said yesterday that most businesses had consistently said a key obstacle to attracting investment and expanding businesses was the broken South African visa regime.
Wenger said at least 78% of 133 businesses surveyed rated South Africa’s visa regime as “very poor” compared to other countries the respondents have operations in, while 26% of businesses moved their operations overseas because of South Africa’s cumbersome visa application process.
“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 right at a time when we can ill-afford to lose either,” Wenger said.
“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 time lines to address the well-known challenges.”
Earlier this month, Operation Vulindlela, the joint initiative between the Presidency and National Treasury to drive policy implementation, published a detailed report on visas and recommendations on how to improve the regime.
Several of the recommendations concerned improving efficiencies, including a streamlined documentation and adjudication process, modernised and automated IT systems, and increased capacity in the Department of Home Affairs immigration branch.
The most important recommendations were on the policy front, under which approved employers would have access to a simplified route to bring in skilled employees.
The report also recommended the introduction of a points-based visa system to integrate multiple visa categories and improve the objectivity of visa decisions, enabling highly skilled and well-paid workers to enter the country more easily.
Business Leadership South Africa CEO Busi Mavuso said yesterday that all those were excellent improvements on the status quo.
“These regulations could greatly improve the business environment,” Mabuso said.
“Businesses have been grappling with the loss of skills through emigration – the Operation Vulindlela report notes that 900 000 workers emigrated in 2020 mostly to the UK and Australia. The vastly streamlined visa process will enable businesses to partly overcome this loss.”
Deputy Minister for Planning, Monitoring and Evaluation in the Presidency Pinky Kekana said the visa issues were one of three “very critical hurdles” the government needed to resolve in order to boost intra-Africa trade.
Speaking at the AUBC launch, Kekana said relaxing visa issues among African countries would enable the free movement of goods and people, driving economic growth similar to the “Swinging Sixties” experienced by the EU.
“We need to face up to, and make a decision on the free movement protocol,” Kekana said.
“I know Minister (of Home Affairs Dr Aaron) Motsoaledi is working hard on that, which contract to its name is not free at all, but rather a highly regulated piece of continental policy that will align all member states towards the freedom of movement of the right people for people labour, education and trade.”