78% of businesses rate SA VISA regime as ‘very poor’

29 May 2023

In almost every interaction I have with businesses in the Western Cape, a topic which is raised consistently as a key obstacle to attracting investment and to expanding existing businesses is the broken South African visa regime.

To facilitate foreign investment, companies need to be able to easily access South Africa and those who apply for critical skills visas typically help to develop new and existing sectors, in line with international best practise or by helping to new industries through skills development. This is why the investment and critical skills visas are key enablers of economic growth and job creation.

To gather more specific information on the challenges experienced by businesses on this issue, the Western Cape Government Department of Economic Development and Tourism conducted a survey, at the end of November 2022.

In total, 133 responses were received from business in sectors including ICT/Technology/Software service, Tourism, Finance and business services, Manufacturing, Agriculture/Agri-processing, and Business Process Outsourcing.

A critical finding of this survey was that 78% of respondents rated the immigration application system in South Africa as very poor compared to other countries the respondents have operations in.

Another deeply concerning finding was that 26%of businesses moved their operations overseas, costing countless jobs in South Africa, as a result of the serious challenges they faced with the national visa system.

Some of the other key results include:

The main reason respondents required a visa was for work purposes, to employ critical skills that are not available in South Africa, and because their businesses need to employ foreign staff.

The top three visas applied for:

Work visa (19%)

Critical skills work visa (18%)

Immigration visa (15%)

The top three complaints/issues with the visa application system:

Delays in the approval process (17%)

Applicants not receiving feedback on their applications (14%)

Lack of an escalation mechanism for complaints (10%)

The impact on the businesses affected by the visa application system include:

Time delays (25%)

Cost implications (22%)

Inability to hire the required skilled workers (21%)

The top three measures taken by the respondents to address the challenges experienced with the visa application process were:

Moving operations abroad (26%)

Employing fewer staff (17%)

Scaling down operations (17%)

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.

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 timelines to address the well-known challenges.

The Western Cape Government stands ready to assist in any way possible so we can keep and expand the businesses we have and attract the investment we need to create more jobs for the residents of the province.

Issued by Mireille Wenger, Provincial Minister of Finance and Economic Opportunities, 29 May 2023