The gridlock affecting work-permit applications in South Africa is limiting expansion by German companies in the country and threatening operations that support 100 000 jobs, an industry association said.

While South Africa is taking steps to improve an approval system and make it easier and quicker to get permits, the snarl-up that was exacerbated by the Covid-19 pandemic has limited the entry of skilled workers into a country that has a dire shortage of them. Between 2014 and 2021 only 25 298 skilled-worker permits were approved by the country, which has a population of 60 million. 

`The visa matter spans the entire hierarchy of German business in South Africa` ranging from chief executive officers to technicians, the Southern African-German Chamber of Commerce and Industry said on Thursday in a response to questions. `This is of course not only a concern to German business but also to the country itself` as German companies operating in South Africa provide jobs for 100 000 people along their supply chains, the chamber said. 

Companies operating in South Africa struggle to find skilled workers, a result of a dysfunctional education system and exacerbated by emigration. Volkswagen AG and Bayerische Motoren Werke AG operate factories in the country and the chamber has over 600 member companies. Andreas Peschke, Germany’s ambassador to South Africa, has previously estimated that German companies account for 10% of South Africa’s export income. 

Germany is South Africa’s third-biggest single-country trade partner after China and the US, with two-way movement exceeding $20 billion last year, according to data compiled by Bloomberg.

Companies not being able to get permits for executives at local subsidiaries is endangering investment and `the same goes for technicians not being able to enter the country, while at the same time there are no skilled workers available in South Africa to service machinery,` the chamber said. 

The group said that while there have been improvements this year, its members had more than 100 open work permit applications in the second half of last year. In one case it took about 18 months to get a permit for a managing director and the owners of one company sold up after their visa was rejected despite 30 years of doing business in the nation. 

The visa-approval process remains opaque and offers from the chamber to help improve the process and digitize it have not been responded to, the German chamber said. 

Siyabulela Qoza, a spokesman for the Department of Home Affairs, didn’t answer a call to his mobile phone or respond to a text message.

SA National Defence Force (SANDF) members deployed to the borders under “Operation Corona” have effected hundreds of arrests of suspected illegal immigrants and seized contraband including stolen vehicles and narcotics worth millions of rand.

The army, detailing its June successes, said in Mpumalanga, along the SA and Mozambique border, soldiers confiscated narcotics valued at R1,682,442 and contraband goods valued at R70,300. It said 205 undocumented persons were apprehended and 19 criminals were arrested.

Along the Free State border with Lesotho, six undocumented people  were apprehended, one criminal arrested, narcotics valued at R337,500 seized, a water truck worth R2m seized and contraband worth R19,000 confiscated.

Along the Eastern Cape border with Lesotho, one person was arrested, contraband worth R10,285 was confiscated and 159 undocumented persons were apprehended.

At the Limpopo border with Zimbabwe, 250 undocumented persons were arrested while stolen vehicles worth R400,000 were recovered and contraband worth R 529,767 confiscated.

Sandf members also recovered stolen stock worth about R252,200 and made two arrests.

At the KwaZulu-Natal borders with Mozambique and Eswatini, five undocumented persons were apprehended, three suspected of crimes were arrested, stolen vehicles worth R865,000 were recovered and narcotics valued at R2,313,596 seized. Contraband goods valued at more than R1m were confiscated.

Twelve undocumented persons were apprehended in Gauteng while three were nabbed at the North West border with Botswana. The Northern Cape border had the lowest number of incidents with only two undocumented people arrested, the statement said.

South Africa has begun taking steps to resolve what the presidency believes is the biggest impediment to growth after persistent blackouts: An acute shortage of skills. 

A raft of changes to simplify the rules governing the snarled up and byzantine work permit regime were submitted to the state legal adviser last week and are expected to be passed into law in coming months, said Saul Musker, director of strategy and delivery support in the South African Presidency.

Musker said that the adviser will consider them for a few weeks, they will then be put out for public comment for 30 days before being taken to parliament.

Companies operating in South Africa struggle to find skilled workers, a result of a dysfunctional education system exacerbated by emigration. Still, between 2014 and 2021 only 25,298 skilled work permit visas were approved, according to a report prepared for the presidency. More than half of applications were rejected on grounds including errors in the complex application process. 

“It’s harder to come to South Africa than almost any other country in the world despite the acute shortage of skills we have,” said Musker. “Investors are not able to grow their businesses in South Africa, or have their regional head offices here. It’s a huge and very real constraint to growth.”

A study cited in the report, prepared by a team working under the presidency headed by Mavuso Msimang, a former director general of the Department of Home Affairs, projects that a moderate increase in skilled migration could lift gross domestic product by 1.2%.

Points-Based

Eight recommendations in the study, which was released by the presidency in April, include a points-based system, where applicants who meet a minimum education and salary level would be granted work permits. 

Larger employers could be granted trusted employer status, which would allow them to assess qualifications of workers they bring in without having to subject them to arduous state verification process. New permit categories to ease the entry of remote workers and those working for startups should also be created.

Ultimately, work permit applications may be able to be made and tracked online instead of through the submission of documents to embassies in what then becomes largely a manual process.

The difficulty in getting work permits “definitely is one of the areas of discussion between business leaders and the authorities,” said Kuseni Dlamini, chairman of Massmart Holdings Ltd., a unit of Walmart Inc., and a board member of the American Chamber of Commerce in South Africa. “We hear a lot of encouraging and promising pronouncements, but there is a disconnection between the pronouncements and the operations of the system,” he said.

Other measures proposed include streamlining the documentation process and the adjudication of those documents, boosting the capacity of the department and improving the quality of its computer systems, which currently connect to the Internet at one sixtieth of the speed of an average system in a bank. 

Current requirements, which include having to submit qualifications to the South African Qualifications Authority in a time-consuming process and often having to prove that a South African cannot be found for the job, have frustrated applicants and potential employers and resulted in a massive backlog of applications. 

Busi Mavuso, the chief executive officer of lobby group Business Leadership South Africa, in an interview earlier this year cited frustrations from foreign companies unable to get directors into the country and complaints to her organization from the French South African Chamber of Commerce that their members had received no response to work permit applications.

“One big impairment that we’ve been talking about for quite some time is the work visas,” she said. “It has been a problem. It continues to be a problem.”

Some changes have already been made, including doing away with the need for radiological reports to prove an applicant doesn’t have tuberculosis and limiting the need for police clearances from the countries where an applicant has lived to the last five years. 

Until recently applicants for a critical skills visa would need to meet 22 requirements. While processing a work visa in South Africa can take 48 weeks or more the process in Kenya is a maximum of 12 weeks and just eight weeks in Nigeria, according to the report submitted by Msimang’s team. 

South Africa’s skills shortage has been created through a work permit system that wasn’t designed for a skills-scarce country and a hostility toward foreign workers, a possible result of the high number of undocumented migrants in the country and one of the world’s highest unemployment rates, according to Musker and Msimang.

“I found a lot of protectionism,” Msimang said in an interview. “The lamentable statistics that you talk about in terms of visas that were approved really had to do with this hostile attitude toward the utilization of foreigners’ skills.”

This, despite the fact that research cited in Msimang’s report found that each skilled employee can create more than one job for lesser skilled workers, as well as boosting productivity and competitiveness and adding to tax revenue.

“What appear to be excessive security concerns and onerous administrative processes unduly delay and sometimes even prevent the admittance of legitimate, crucially needed immigrants,” the team said in the report.

South Africa has begun taking steps to resolve its severe shortage of skills and a problem compounded by a messy work permit process.

Getting a work permit for SA has become a complex process. Image: Pixabay 

A host of changes to simplify the rules governing the complex work permit regime were submitted to the state legal adviser last week and are expected to be passed into law in the coming months, said Saul Musker, Director of Strategy and Delivery Support in the South African Presidency.

Musker said that the adviser will consider them for a few weeks, before they are put out for public comment for 30 days. After that they will be taken to parliament.

Companies operating in South Africa are struggling to find skilled workers, and seen as a result of a dysfunctional education system exacerbated by emigration. Still, between 2014 and 2021 only 25 298 skilled work permit visas were approved, according to a report prepared for the presidency. More than half of applications were rejected on grounds including errors in the complex application process.

“It’s harder to come to South Africa than almost any other country in the world despite the acute shortage of skills we have,” said Musker. 

“Investors are not able to grow their businesses in South Africa, or have their regional head offices here. It’s a huge and very real constraint to growth.”

Migration could lift GDP 

A study cited in the report, prepared by a team working under the Presidency headed by Mavuso Msimang, a former director general of the Department of Home Affairs, projects that a moderate increase in skilled migration could lift GDP by as much as 1.2%.

Eight recommendations in the study, which was released by the Presidency in April, include a points-based system, where applicants need to meet minimum education and salary requirements in order to be granted work permits. Other recommendations included: 

• Larger employers could be granted trusted employer status, which would allow them to assess qualifications of workers that they bring in without having to subject them to an onerous state verification process. 

• New permit categories to ease the entry of remote workers and those working for startups should also be created.

• Ultimately, work permit applications should be able to be tracked online instead of through the submission of documents to embassies, in what then becomes largely a manual process.

The difficulty in getting work permits “definitely is one of the areas of discussion between business leaders and the authorities,” said Kuseni Dlamini, chairperson of Massmart, a unit of Walmart, and a board member of the American Chamber of Commerce in South Africa.

Empty promises 

“We hear a lot of encouraging and promising pronouncements, but there is a disconnection between the pronouncements and the operations of the system,” he said.

Other measures proposed include streamlining the process and the adjudication of those documents, boosting the capacity of the department and improving the quality of its computer systems. Currently, these systems connect to the Internet at one sixtieth of the speed of an average system in a bank.

Current requirements, which include having to submit qualifications to the South African Qualifications Authority in a time-consuming process and often having to prove that a South African cannot be found for the job, have frustrated applicants and potential employers and resulted in a massive backlog of applications.

Busi Mavuso, the CEO of lobby group Business Leadership South Africa, in an interview earlier this year echoed similar frustrations from foreign companies that have been unable to get directors into the country. There have also been complaints to her organization from the French South African Chamber of Commerce that their members had not received responses to work permit applications.

“One big impairment that we’ve been talking about for quite some time is the work visas,” she said. “It has been a problem. It continues to be a problem.”

Some changes have already been made, including doing away with the need for radiological reports to prove an applicant doesn’t have tuberculosis, and limiting the need for police clearances from the countries where an applicant has lived for five years.

A quicker permit process in Kenya, Nigeria

Until recently, applicants for a critical skills visa would need to meet 22 requirements. While processing a work visa in South Africa can take 48 weeks or more, the process in Kenya is a maximum of 12 weeks and just eight weeks in Nigeria, according to the report submitted by Msimang’s team.

According to Musker and Msimang, South Africa’s skills shortage has been created through a work-permit system that wasn’t designed for a skills-scarce country and a hostility toward foreign workers.They see this as a possible result of the high number of undocumented migrants in the country and one of the world’s highest unemployment rates.

“I found a lot of protectionism,” Msimang said in an interview. “The lamentable statistics that you talk about in terms of visas that were approved really had to do with this hostile attitude toward the utilisation of foreigners’ skills.”

This is in spite of research cited in Msimang’s report that found that each skilled employee can create more than one job for lesser-skilled workers, as well as boost productivity and competitiveness as well as adding to tax revenue.

“What appear to be excessive security concerns and labourious administrative processes unduly delay and sometimes even prevent the admittance of legitimate, crucially needed immigrants,” the team said in the report.

More than 40% (147) of Africa`s 345 companies with revenues exceeding R18.8 billion (US$1 billion) are based in South Africa, a new report by wealth tracker McKinsey Global Institute (MGI) says. SA is the leader of the pack because it registered a 5.5% yearly average growth between 2015 and 2021 against a continental average of 4.9%. Egypt comes in second with 43 billionaire companies, followed by Nigeria with 23 and Morocco with 20. A distant fifth is Angola, with nine billionaire firms. The rest of the African countries range between zero and 6.The report revealed that 230 of those firms were founded in Africa or by Africans. MGI estimates that by 2030, Africa`s large corporations would have a combined value of over R10 trillion. "We estimate that large companies in Africa could increase their revenues collectively by more than $550 billion by 2030 with ambitious strategies to access new markets, strengthen productivity, increase operational efficiency, and play a role in society," reads the report. The report notes that the Covid-19 pandemic slowed down economic growth on the continent as "the number of large corporations overall on the continent shrank compared to other regions and countries." Most of the top-performing companies on the continent, according to the report, are in the fields of mining, oil and gas, retail, telecommunications, manufacturing, and financial services.

Poverty and growth

In terms of population, Africa has the numbers. According to estimates from Our World Data, by 2030, Africa's most populous countries would be Nigeria, the Democratic Republic of the Congo, Ethiopia, Tanzania and Egypt.

The World Bank estimates that if things such as healthcare, economies, governance, and food security don't improve, nine in 10 extremely poor people will live in sub-Saharan Africa.

Consumption in Africa falls behind at the global level because most people on the continent live in conflict, famine and poverty.

Hence to unlock R56.4 trillion in consumer power, "this will take more than a growing population", says the report. 

There's a need for political and leadership will at the country-to-country level for the continent to map a sustainable growth pattern.

"Successes achieved at granular levels in countries, cities, and sectors offer models to reaccelerate growth.

"Increasing digitisation, developing talent, collaborating more regionally, supporting more business champions, and building green businesses are just some of the ways Africa can increase productivity," reads the GMI report.

The report estimates that if things were done accordingly, 250 million Africans will join the consuming class by 2030 and they will present "an opportunity for businesses to offer affordable prices at scale, target expansion in growth hot spots, and innovate in local value chains."