12/06/2018 03:34 BST | Updated 12/06/2018 03:34 BST

Xenophobic Attacks: Do Foreigners REALLY Squeeze Locals Out Of Jobs And Opportunities?

A study finds that foreigners may be displacing jobless youth in starting small businesses, but an expert says the impact of foreign entrepreneurs is small.


In a sea of xenophobic attacks, the attacks on foreigner-owned shops are the third-most common form, according to Xenowatch, a platform to monitor xenophobia launched today by the African Centre for Migration and Society based at Wits University.

The platform has mapped attacks on foreigners, and it has counted 227 acts of looting, the third-most prevalent form of attack after damage to property (254 incidents) and assault (240 incidents). The mapping includes attacks from 1994 to May 2018.

READ: Khayelitsha Residents Destroy Shack In Xenophobic Attack

In May, the North Region Business Association ordered foreign shopkeepers out of the townships of Inanda, Ntuzuma and KwaMashu in the north of Durban, but the threat was stillborn after police kept foreign shop-owners safe.

The incident is part of a growing trend of attacks on foreigner-owned shops — which is almost a by-product of community protests which dot the South African landscape, especially in winter. A 2016 study on jobs by the Development Policy Research Unit at UCT and the World Bank Group found that immigrants had seen the opportunities of township businesses more quickly than local youth.

"Our data indicate that South African township youth are not responding to the full potential of business opportunities in their own communities. Proportionally, immigrants have responded more effectively to employment and business," wrote Andrew Charman, who conducted the study.

He surveyed micro-enterprises in nine townships in Cape Town, Johannesburg, Durban and around Welkom in the Free State, and mapped 10,842 micro-businesses.

The research was part of a study to show that because South Africa has a youth unemployment rate of over 50 percent — or six million young people — "most youth will need to find employment in the informal sector. Yet data on labour-force participation indicates that youth are not widely active in self-employed activities or informally employed in micro-enterprises".

In two townships the study was conducted in, only 15 percent of micro-enterprises were run by young people under 30. Of this, one in three of the young entrepreneurs were non-South Africans. In Delft, Cape Town, four out of 10 hair salons and barbers were owned by young people, and seven in 10 of these were owned by foreign entrepreneurs.

READ: The Free Movement Of People Could Benefit Africa

"The lifestyle and leisure sectors contain some of the most promising youth start-ups," according to the study, which found that, "Some of the examples we encountered are the young entrepreneurs that run internet cafés or produce music at home and DJ at taverns and shebeens, or design flyers and posters, or operate gyms, design and make clothes or run takeaways that sell fast food to late-night revellers."

The study found that South Africans are majority owners of these kinds of businesses.

"Some of our best estimates are that foreigners entering the labour force have minimal overall effects on jobs, but may create wage suppression or replacement in certain sectors or sub-sectors. As for business formation, I haven't seen anything to indicate that small-scale businesses are replacing South African-owned retailers or service providers," says Loren Landau, South African Research Chair in Human Mobility and the Politics of Difference at Wits University.

"Obviously the larger 'china mall'-style shops are having massive ripples across the SA retail space, but at the township level, these effects are small. What we need to understand is that there are multiple entanglements with any foreigner-owned business. Many use spaces rented from South Africans and buy from South African wholesalers. Many hire South Africans. This helps South Africa in many ways — both consumers and producers," says Landau.

Vincent Lali/GroundUp
Residents of Khayalitsha destroyed a shack on Saturday, June 9 2018, and then stole the contents and building materials. The shack housed a shop run by a South African woman and her Congolese husband.