Two new data sets shed some light on a topic that is the subject of much anecdotal discussion but little hard evidence: emigration.
One, from the SA Revenue Service (Sars), shows the number of individuals who ceased to be tax-resident, or who formally emigrated for tax purposes. The other is a new study on migration from Stats SA, which for the first time provides estimates of how many South Africans are living abroad — more than 900,000 — and how that’s grown over time.
There’s a sense in the suburbs that emigration is rising, and specifically that a wave of people left after Covid-19, many of them young professionals in their 30s and 40s. Added to that are those SA loses without even knowing it — those who go abroad to study and never return.
The current wave, if it is a wave, seems different in some important respects from the old white SA “packing for Perth” story. It’s much more diverse: “Colour’s got nothing to do with it any more,” says a partner at one of the big four professional services firms. “It’s about opportunity.”
Pull factors seem to be driving emigration at least as much as push factors such as crime. Many of the emigrants are simply high-level economic migrants, whose job prospects are better in the faster growing economies of Europe, North America and Oceania, with their huge labour shortages, than in zero-growth SA.
The UK and Ireland have been recruiting aggressively for finance professionals, and plenty of IT people have reportedly left SA for jobs in the Netherlands, Germany and elsewhere. Even for graduates with less scarce skills, economies in the Gulf or the east offer more opportunity than SA. A third difference, say the anecdotes, is that many émigrés are returning to SA.
The two new data sets provide at least some answers, but they raise a whole lot more questions and must be read with care. That’s certainly the case with the Sars data, which shows just 219 individuals emigrated in the year to March, down from 5,558 two years before. All that tells us is that most of those who emigrate do not go through the formal process — and no doubt don’t need to now that exchange control for individuals is all but gone and the Treasury has abolished the whole concept of “financial emigration”.
More interesting are the more than 3,700 individuals who ceased to be tax-resident in the latest year, according to Sars, up from 2,029 two years ago. In theory, people who are living and working abroad and have given up their SA homes ought to formalise their non-resident status with Sars, even if they intend to return some day.
In practice few do, and we can safely assume the tax émigré numbers are a small subset of actual emigration. But the tax authority collected a decent R300m in capital gains tax in the latest year from those who formally departed the tax base for fairer climes. And the numbers do provide a window into that growing SA diaspora.
Stats SA’s new study provides a far wider window. It shows 915,000 South Africans were living abroad in 2020, almost double the number two decades before. The figures suggest that on average almost 26,000 people a year left in 2015-2020, from about 19,000 a year in the previous 15-year period. The UK, US and Australia are the top three choices for SA expats.
Skills
Unfortunately, Stats SA doesn’t have breakdowns by skill level or age group, so we can’t see who is leaving, but can guess it is mostly those with the necessary means or skills. What the numbers do confirm is that more than 12,000 South Africans are now studying abroad, double the number of a decade ago, raising the question of how many of those will bring their expensive educations back to SA.
So the question is not whether there is an undercount, but how large it is. The Stats SA data relies on numbers from the destination countries. Some keep detailed population records on their foreign-born residents, others do not. More problematic for the numbers are the South Africans with dual citizenship who entered their new countries on second passports without ever having to apply for work visas or residence permits, and do not reflect in those countries’ records as immigrants.
Whatever the real number, SA has lost, and continues to lose, large numbers of people, and most are the skilled, experienced, productive individuals the economy most needs. That hollowing out of the skills base affects productivity and the tax base. It deprives SA of what US academic Ricardo Hausmann has called the “know-how” that’s an essential ingredient for higher growth.
But if skilled young people are leaving it’s not necessarily all bad. Young graduates in many countries go travelling and work their way around the world. SA has made it easier for émigrés to return. It stands to be enriched by their experience and expertise if they do.
Stats SA found 27,000 people returned to SA in 2022, though that was way below the 46,000 in 2011 so it’s not necessarily the trend of suburban anecdotes. Even those who don’t return can benefit SA if they keep their ties, remitting money to relatives at home or investing time or money back in SA, as the diasporas of many other countries do.
Of course, skilled emigration would be less of a problem if SA simply encouraged skilled immigration. But home affairs granted skilled work visas to just 26,000 foreigners in total in the six years to 2021 — equivalent to a single year’s emigration.
Happily, reforms to the work visa system are at last gaining pace. With luck that will over time make for more two-way flow, and a more dynamic economy that can retain and attract the talent it needs.
• Joffe is editor-at-large.
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