Workers, Owners Fear for Safety as Anti-Immigrant Unrest Shakes South Africa's Business Se

Foreign-owned businesses were attacked, employees restricted their movements, and multinational firms quietly updated their crisis protocols, all before the June 30 anti-immigrant protests had even fully subsided. For the workers, business owners and families caught in that uncertainty, the question was not abstract: would South Africa hold together, or would another cycle of unrest chip away at the stability ordinary people depend on?

The demonstrations, held under heavy police presence, remained largely peaceful in most areas. Isolated incidents of violence and looting were documented. Even so, the relatively contained unrest reignited anxieties that have been building for months, as vigilante groups reportedly attacked foreign-owned businesses and pressured government to take harder action against undocumented migrants.

President Cyril Ramaphosa, speaking before the protests, acknowledged public concerns about undocumented immigration but insisted that such issues must be resolved through legal channels. Immigration enforcement, he said, is a state responsibility, not a matter for citizens to take into their own hands.

For Professor Ahmed Shaikh, CEO of REGENT Business School, the deeper worry is what this pattern of violence reveals about South Africa’s capacity to maintain order and protect the people who live and work here. “In an economy competing for capital, talent and confidence, xenophobia is a self-inflicted economic wound,” Shaikh explains. “Investors may tolerate policy uncertainty for a period of time, but they cannot tolerate uncertainty about public order and the rule of law.”

Shaikh points out that companies operating in South Africa are now factoring social unrest directly into their risk assessments. Multinational firms are implementing enhanced security measures, restricting employee travel, adopting flexible work arrangements and developing crisis response protocols. The calculation is straightforward: if foreign executives, staff members and their families feel unsafe, relocation to other African commercial hubs becomes a realistic option. Such departures would constitute what Shaikh calls “a significant economic setback.”

Meanwhile, the timing compounds the damage. Cameron Hewson, Portfolio Manager and Head of Product at Cinnabar, notes that South Africa has recently been removed from the FATF grey list, while both S&P and Fitch have upgraded the country’s sovereign credit rating and Moody’s has shifted its outlook to positive. These are hard-won signals that some policy reforms are gaining credibility. “Another outbreak of violence would work directly against that progress,” Hewson warns. “From an investor’s point of view, what this does is that it raises concerns about social stability, government capacity and the ability to protect people and businesses when tensions rise.”

The current episode sits within a troubling historical pattern. South Africa experienced deadly xenophobic violence in 2008, when 62 people were killed and thousands displaced. Further attacks erupted in 2015 and 2019, each time disrupting commerce, straining international relations and reinforcing doubts about the state’s ability to prevent recurrence. International media attention fades. The economic damage accumulates.

Larry Hodes, CEO of Grow Franchising and board member of the Franchise Association of South Africa (FASA), sees the threat extending to one of the country’s most vital employment sectors. Franchising accounts for approximately 15% of South Africa’s GDP and supports roughly 500,000 jobs. Recurring violence sends a message that the country cannot reliably protect businesses and workers when tensions spike. “If we want to retain our position as Africa’s commercial hub, we must show that immigration is managed through effective law enforcement and leadership, not violence,” Hodes states. “Confidence is one of our greatest economic assets, and we cannot afford to lose it.”

Political analyst Howard Sackstein frames the unrest as symptomatic of deeper state failure. Border management, immigration policy, crime prevention and economic opportunity have all deteriorated, he argues, and repeated attacks on foreign nationals have damaged South Africa’s continental reputation and weakened its appeal as an investment destination. The concerns raised by business and investment communities, as documented in reporting at https://www.forbesafrica.com/current-affairs/2026/07/01/significant-economic-setback-xenophobic-unrest-reignites-fears-over-south-africas-investment-climate/, point to governance challenges that extend well beyond a single day of protests.

South Africa retains genuine strengths: sophisticated financial markets, established institutions and deep professional expertise. Yet as African nations compete more fiercely for investment, talent and regional headquarters, reputation has become both the country’s most valuable economic asset and its most vulnerable one. The open question now is whether the recent credit rating upgrades and grey-list removal can hold their weight against a pattern of unrest that, so far, no administration has managed to break.