South Africa’s restaurant industry faces collapse

There are growing expectations that President Cyril Ramaphosa will announce in his State of the Nation this week that jobs in certain sectors of the economy will soon be reserved exclusively for South Africans.

The possible exclusion of foreign nationals from certain sectors of the economy has reportedly been discussed by the African National Congress (ANC) and its Congress of South African Trade Unions (Cosatu) and the Communist Party of South Africa’s partners in the tripartite alliance during a recent Lekgotla.

The possible move would be in a bid to reduce the country’s record unemployment rate, which now stands at 34.9%.

Analysts say excluding foreign nationals from parts of the economy could lower the overall quality of jobs and exacerbate the country’s skills shortage. Econometrix chief economist Azar Jamine says the increased skills shortage will further undermine long-term economic growth and job opportunities.

“In terms of legislation to prevent foreigners from coming to work here. I think that is likely to be very unwelcome internationally. The fact is that the country is currently lacking in skills, and many of those skills can only be met by encouraging foreigners to come with the skills to pick them up in the country.”

Labor and mining analyst Mmamogethi Molopyane says people are expected to move in a global economy because it improves economic activity and skills transfer.

“Some manufacturing sectors, even mining, even higher education institutions, you see that some of the vacancies they will have a hard time filling if they don’t find the skills, knowledge and expertise here And that’s why I say it’s going to be tricky. I think they mention it so that it becomes a way to start the consultation, a way to start the debates.

The Efficient Group’s chief economist says excluding foreigners from certain sectors of the economy could lead to unrest in the service and tourism sectors which tend to employ large numbers of foreign nationals.

“It’s a horrible xenophobic idea. Imagine if the President announces that you can only employ South Africans in restaurants and kick millions of Zimbabweans out of South Africa, it will lead to horrible misery in Zimbabwe itself, it will lead to a collapse of the service like the restaurant industry in South Africa.The only reason he would consider such a thing is to score cheap political points.

Ramaphosa is also expected to discuss a way forward on the national minimum wage, among other issues, when he delivers his State of the Nation Address on Thursday this week.


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Cecil N. Messick