Whether it’s economic issues or the discussion of SAA, the nation that once represented fast economic development now faces demographic issues. With a population of around 58 million people, South Africa is the fifth largest country by population in the continent and ninth largest by land area.
Current issues have led to a wave of voluntary migrants, that are leaving the country while they still can, in fear of economic recession and political turmoil.
A recent study by the investment and financial consulting company, Momentum Investments, saw a rise in the net emigration of South African nationals. The main reasons according to the head of Human Capital, Desire Pauw, lies behind the numerous corruption scandals that rose from inside the government and the rise in crime rates. According to Ms.Pauw this increase in migration by the highly skilled workforce deeply impacts tax arrecadation and service providers.
“The reality is that the higher your salary, the higher your tax bracket which means more money contributing to developing the South African infrastructure.” Desire Pauw, in an interview to BusinessTech ZA.
The loss of skilled workers in a developing economy can lead to deep impacts looking from an economist’s perspective. This perspective was given by Sanisha Packirisamy, an economist at Momentum Investments. “The loss of these skills can lead to a decline in tax revenues, a skills shortage, a negative impact on sentiment… a loss in critical health and education services… and can dent the country’s long-term growth prospects through the erosion of innovative ideas which are lost through brain drain.” The danger of this emigration can be seen by looking at data from the past couple of years that show the amount of skilled workers that left the country in a given period. In 2019, around 30,000 skilled workers left the country, with an estimate of 1,000-2,000 of these workers being highly paid in specialty areas, such as healthcare. Also according to Ms. Packirisamy, the loss of a labour force can lead to a decrease in the development of infrastructure that is key to a growing economy.
Moving also poses the risk of job uncertainty, abandoning their homes, old jobs and sometimes even their families, the migrants may spend some time unemployed in the country that they immigrate. The consequences of an unemployed worker grow deeper than the personal aspect, the individual with a limited power of purchase limits their spending to only necessities.