South Africa's Anti-Migrant Push Threatens Economic Output Across Key Sectors

A 30 June deadline. That is the ultimatum South Africa’s March and March movement issued to all undocumented migrants, and the organization now plans to intensify its campaign ahead of local government elections scheduled for 4 November. The economic cost of that escalation is already measurable across multiple sectors.

The country’s roughly three million migrants, officially representing under 4% of the population, generate substantial output through informal and formal enterprises. The campaign has already displaced over 160,000 people through official repatriation programs, with additional numbers returning privately or relocating internally. For investors and operators with exposure to South African retail, agriculture, and manufacturing, the disruption is not theoretical.

Spaza shops illustrate the stakes most sharply. An estimated 150,000 to 200,000 of these small convenience stores generate nearly three million jobs and contribute just over 5% to South Africa’s gross domestic product. Predominantly owned by Somali and Ethiopian migrants, they function as critical supply-chain infrastructure, linking manufacturers, wholesalers, and transporters while extending credit to low-income customers. Anti-migrant violence has devastated the sector. In Soweto, vigilantes beat Somali trader Harun Gebrelasse and looted his store in June, despite his holding valid visa and business permits. Two days later they returned and torched the property. His landlord, Maggie Mpharana, had rented him the garage for approximately $180 monthly for a decade and employed her teenage son through the arrangement. Both lost income overnight.

March and March’s latest tactic compounds the pressure on property owners. Bayene, an Ethiopian migrant who opened his own spaza shop in Soweto in 2015, reports that the movement now threatens landlords with property destruction unless they evict foreign tenants. “My landlord doesn’t want to kick me out, he’s protecting me,” Bayene said, “but some landlords, to save themselves, have complied.” For commercial property operators, that threat reframes the risk calculus entirely.

Meanwhile, the disruption reaches further up the supply chain. Shuab, a Somali national running a wholesale business from a 2,000-square-metre warehouse in Soweto, supplies hundreds of spaza shops across the area. Business has declined sharply over three months. Six of his ten employees are South African citizens, and their positions are now at risk. Shuab draws a clear distinction between this campaign and previous xenophobic episodes: “Whether you are legal or illegal, so long as you are not South African, they will tell you to close.”

The Jeppe Street area in central Johannesburg, a cross-border trading hub where resale traders from across southern Africa spend approximately $600 million annually, has registered a measurable contraction. One Zambian bus operator reported passenger traffic down by at least 30%. The City of Johannesburg’s demolition of informal container shops at Marble Towers, justified under municipal safety bylaws, has further constrained migrant-led commercial activity in the precinct.

Agriculture faces particularly acute labor shortages. In KwaZulu-Natal’s sugar belt, one farmer reported losing up to 80% of his cane-cutting workforce virtually overnight. Horticulture, fruit, and vegetable operations, already navigating narrowing margins and climate uncertainty, have similarly lost regional workers from Zimbabwe, Mozambique, and Lesotho. Employers report difficulty retaining South Africans for seasonal, physically demanding work on remote farms.

Textile manufacturing is also absorbing the shock. Jassat Esat, who runs a factory with predominantly local staff but relies on regional workers for machinist and technical roles, fears that entrenched xenophobia backed by immigration raids will further damage an industry already competing against cheap second-hand clothing imports.

The macro-level exposure is significant. William Gumede, founder of the Institute for Social Dialogue, warns that xenophobia threatens trade links worth $42 billion annually. Approximately 30% of South African exports flow to the rest of Africa, and informal trade could push that figure to 35%. “We’re fighting the rest of Africa, while we’re also destroying our economy,” Gumede said.

South Africa’s structural conditions have created the political environment in which March and March operates. Youth unemployment exceeds 60% for those aged 15 to 24. Over 80% of 9 and 10-year-olds cannot read for meaning, a skills deficit that compounds long-term labor market dysfunction. Critics argue some employers deliberately hire exploitable foreign nationals at below-minimum wages; employers counter that qualified South African candidates are difficult to find. March and March spokesperson Sandile Dube acknowledged the economic disruption but defended the campaign’s logic: “There is no way you can’t be worried about the shake-up of the economy, but I’m also worried about crime. You can’t say because of economic benefits you leave a crime.”

The movement’s political momentum appears strengthened by the ruling ANC’s weakness heading into November. Populist parties are positioned to capitalize on nativist sentiment among a middle class anxious about job losses in an economy growing barely 1%. Gumede frames the broader failure bluntly: “Intellectually, xenophobia is not being contested. Instead, people are looking for scapegoats. It’s a tragedy.”

Whether that political calculus shifts before the November vote, or whether the economic damage accumulates to a point that forces a policy response, remains the open question for anyone with capital at stake in southern Africa’s largest economy.