Is xenophobia in South Africa a risky investment?

Xenophobia has flared up repeatedly in South Africa for decades. Now, protests against irregular migration have turned increasingly violent in many cities Right-wing movements and monitoring groups There are demands that undocumented migrants be released by June 30. Fears of increasing tension are increasing.

Jo Weary, co-director of the African Center for Migration and Society at the University of the Witwatersrand, links radical protest groups to right-wing populist parties like ActionSA, who she says are supporting them.

Groups such as “March and March” and “Operation Dudula” are central. Very also points to former President Jacob Zuma’s ties to the MK party. “They blame foreign residents for the shortcomings in the country’s social services. After all, it’s about gaining political support and votes in the elections,” Very told DW.

Xenophobia in South Africa: Who is really paying the price?

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Tension is high due to local elections to be held in November 2026. Highlighting inequality and unemployment, he said, “We are currently witnessing a government crisis in South Africa, in which foreigners are being scapegoated and held responsible for the failure of the state to fulfill its duties and promises.”

Yet migrants play an important economic role. Foreign investors and entrepreneurs contribute to jobs, trade and industry. Zimbabwean telecoms entrepreneur Strive Masiyiwa’s Cassava Technologies is partnering with Nvidia to build Africa’s first artificial intelligence (AI) factory. Angola’s state oil company Sonangol, Mozambique’s Matola Gas Company and Nigeria’s Dangote Group are also active in the energy and manufacturing sectors.

Migrants create jobs for South Africans

Many South Africans benefit from these businesses. Nevertheless, the 2025 Afrobarometer survey found that 69% believe immigrants harm the economy, despite estimates that each migrant creates about two jobs.

“Even if all foreigners were deported from the country – they constitute only 4% of South Africa’s total population (65 million) – this would not suddenly lead to job creation or solve these huge structural problems for which the South African government is responsible,” Vere said.

He warned that the current protests are already causing socioeconomic damage. “The forced closure of foreign-owned businesses means South Africans are losing their jobs. Furthermore, the revenue generated by these companies – including tax contributions – is being destroyed.”

A man draped in the Ghanaian flag stands among other Ghanaians as Ghana repatriates hundreds of its citizens from South Africa following incidents of violence against migrants.
Xenophobic protests and attacks have prompted African countries to withdraw from South AfricaImage: Siphiwe Sibeko/Reuters

The disruption also impacts regional trade. Foreign businessmen traveling to Johannesburg support the textile sector and tax base. According to Very, losing this flow weakens income and “provides further incentives for emigration.”

Some protesters on social media are now calling for foreign workers to return so production can continue. Major unions, including COSATU urged to reduce stressand warned members against joining the June 30 protests. The unions echoed President Cyril Ramaphosa, saying “removing foreign nationals from workplaces, communities or public spaces will not reopen factories, repair communities, strengthen public health care, or create sustainable jobs.” They also warned against a repeat of the deadly xenophobic violence of 2008.

Growing fear and economic risk

“As June 30 approaches, foreigners – especially African entrepreneurs and some Asians – are scared, regardless of their immigration status,” said Amy Noelle Mbiozo of the Institute for Security Studies. “Foreign-owned companies, as well as small business owners, such as operators of ‘spaza shops’ (kiosks), are very volatile. Large foreign-owned companies fear the economic repercussions.”

Although anti-immigrant groups claim to target only undocumented migrants, the violence is often indiscriminate. “Big companies are monitoring the situation, and it is not developing in South Africa’s favour,” Mbiozo said, warning of reputational damage and lost investment.

Tension spread due to closure of ‘spaza’ shop in South Africa

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He stressed the need to distinguish between vulnerable migrant workers and organized crime networks, urging more targeted enforcement.

Very said that xenophobia has persisted since 1994, exacerbated by weak government communication and a lack of accountability. Attacks rarely result in arrests, and policing may reflect similar biases. “In this environment, driven by vigilante groups, regional companies think twice about investing in South Africa.”

This article was originally written in German

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