SANISHA PACKIRISAMY: Immigration is an easy lightning rod

There is a visceral quality to South Africa’s immigration debate. It is found in queues outside underfunded public clinics, waiting lists for state-subsidised housing and friction among informal traders in townships where unemployment is in structural crisis.

Because immigration is highly visible, it becomes an easy political lightning rod. Far less visible are the decades of macroeconomic paralysis, fiscal mismanagement and institutional decay that sabotaged these public services long before immigration rose to the top of the political agenda.

This is not uniquely South African. Migration has long been a feature of economic development. UN data shows about 304-million people, or 3.7% of the world’s population, live outside their country of birth, a share that has remained remarkably stable for decades.

As Martin Wolf argues in The Crisis of Democratic Capitalism, prolonged economic disappointment erodes trust in institutions and creates fertile ground for populist politics. Immigration has become one of the most visible expressions of those broader frustrations.

South Africa illustrates this dynamic. Official statistics estimate that immigrants account for 5.1% of the population, about 3.1-million people, though undocumented migration is inherently difficult to measure because those without legal status often avoid official enumeration. Regardless of the precise number, public perceptions are shaped less by migration itself than by the economic environment into which migrants arrive.

Prosperous economies are generally better able to absorb new arrivals because growth expands the tax base, creates jobs and funds infrastructure. Yet economic prosperity is no guarantee against political backlash. Even wealthy countries experience rising anti-immigration sentiment when migration is perceived to challenge cultural identity.

In South Africa’s near-stagnant economy, those pressures become politically combustible. Every additional user of a public service is increasingly viewed as a competitor for scarce resources, rather than a future contributor to the economy.

That perception is reinforced by one of the weakest labour markets in the world. According to Stats SA, narrow unemployment exceeds 32%, while youth unemployment sits close to 60%. In such a constrained environment, opportunities are simply too scarce to absorb newcomers without intensifying competition for jobs.

Competition is concentrated in a handful of occupations. Stats SA’s data reveals that employed immigrant men are overwhelmingly absorbed into wholesale trade (24.2%) and construction (14.8%), while immigrant women primarily occupy domestic services (9.4%). This directly intersects with South Africa’s highly contested informal, semi-skilled and unskilled sectors.

The problem extends well beyond the labour market. The local government, the frontline of service delivery, is under severe strain. The auditor-general reported that only 39 of South Africa’s 257 municipalities (representing just 8% of the local expenditure budget) achieved a clean audit in 2024/2025. Weak financial management and institutional failure have steadily eroded the state’s ability to provide reliable basic services.

Research from the Institute for Security Studies indicates that each immigrant worker generates about two local jobs

This institutional weakness creates a fiscal mismatch. The National Treasury allocates funding for free basic services largely using census-based population estimates. Where migrant populations are undercounted, municipalities are left providing services to more people than their budgets anticipate, while town planning becomes increasingly difficult. This shifts the flashpoint to clinics and schools, blaming visible newcomers for invisible budget failures.

That disconnect is evident in public attitudes. In 2025, Afrobarometer found 69% of South Africans believe immigrants have a negative economic impact, even though research from the Institute for Security Studies (ISS) indicates that each immigrant worker generates about two local jobs. Similarly, 85% of those polled support reducing or ending refugee admissions.

Because the public conversation routinely conflates refugees with economic migrants, a narrative has taken root that the country bears an unsustainable humanitarian burden. Yet data from the UN Refugee Agency and the ISS shows South Africa hosts about 75,000 refugees and 165,000 asylum seekers, a figure that has been declining since 2015 and pales in comparison with continental peers such as Uganda, which accommodates 2-million.

Ultimately, the debate reflects perceptions of failing state capacity rather than the composition of migration. This explains why immigration has become such a potent political issue ahead of this year’s local government elections.

Recognising that immigration places real pressure on local services does not absolve the state of its responsibility to restore growth, rebuild municipalities and enforce the rule of law.

Restoring credible border management, modernising visa administration and enforcing labour regulations are legitimate policy objectives. A state that cannot effectively administer its borders or enforce its own laws inevitably loses public confidence.

South Africa’s immigration debate is ultimately a debate about growth and governance. Until the economy creates meaningful employment, municipalities recover the capacity to deliver basic services and public institutions rebuild credibility, frustration will continue to seek the nearest visible target.

Packirisamy is group economist at Momentum Group