Bank chief warns South Africa: tighter migration rules could cost economy like Brexit did

JOHANNESBURG - Sim Tshabalala, chief executive of Standard Bank Group, stood before political and business leaders at the Kgalema Motlanthe Foundation Winter Seminar in Johannesburg and issued a direct challenge: South Africa risks repeating Britain’s costly post-Brexit experience if it lets anti-foreigner sentiment drive immigration policy.

His warning reflects growing unease inside South Africa’s business establishment. Hostile policies toward migrants, Tshabalala argued, would damage not only the domestic economy but the country’s commercial relationships with its neighbours.

Brexit was his central cautionary example. He cited figures showing that Britain’s departure from the European Union reduced UK gross domestic product by between 6% and 8%, lowered investment by 13% and raised unemployment by roughly 4% compared with a scenario in which the country had remained in the bloc. Independent estimates vary: Britain’s Office for Budget Responsibility puts the eventual reduction in the UK economy’s potential productivity at about 4% against remaining in the EU, with GDP potentially 5% to 6% lower by 2035 than it would otherwise have been. “Look at Brexit,” Tshabalala said, urging South Africa to treat Britain’s experience as a caution rather than a model.

He pushed back hard against the narrative that foreign nationals suppress wages and drain public services. Migrants, he said, are economic participants in multiple roles. “Migrants are not only workers; they are also consumers. They are tenants. They are commuters. They are farmers, they are borrowers, they are traders and they are entrepreneurs.” They rent accommodation, buy food, use public and private transport, pay school fees and start small businesses that may employ local people. They fill skills shortages, expand the productive workforce and strengthen commercial ties between South Africa and other African economies.

Tshabalala also disputed the claim that migrants contribute little to government revenue. Those in formal employment pay income tax. Those outside the formal sector still pay value-added tax and other charges when they buy food, fuel and everyday goods. A major UK government review found that most academic studies detected no significant effect of immigration on the employment or unemployment outcomes of UK-born workers, though wage effects could differ across income groups.

The weight behind his remarks is hard to ignore. Standard Bank operates across more than 20 African markets and is Africa’s largest lender by assets, with total assets of R3.6 trillion (roughly $218 billion at the bank’s reported exchange rate) at the end of 2025. South African companies have invested about R500 billion across the continent, Tshabalala noted, while investments by African entrepreneurs in South Africa stand at roughly R64 billion. Several of South Africa’s biggest companies, spanning telecommunications, banking, retail, mining and energy, depend on operations and customers elsewhere in Africa. That continental integration, he argued, means South Africa cannot separate its domestic economy from the movement of people, capital and businesses across the continent.

Meanwhile, other voices at the seminar reinforced his broader point. Former South African president Kgalema Motlanthe told the gathering that weak economic growth and failures in governance, not migration itself, were fuelling anger and xenophobic violence. MTN Group chair Mcebisi Jonas argued that South Africa’s underlying economic problems would persist even if every migrant left the country, pointing instead to weak growth, inadequate education, poor governance and infrastructure failures.

The timing of the seminar is not incidental. South Africa faces renewed demonstrations and political pressure over undocumented migration and foreigners’ access to employment and public services. At the same time, the country is undertaking a wide-ranging overhaul of its citizenship, immigration and refugee framework. Cabinet approved a revised White Paper on Citizenship, Immigration and Refugee Protection in April 2026 following consultations across the country. The policy seeks to consolidate the Citizenship Act, Immigration Act and Refugees Act into a single law, eliminating contradictions between the existing pieces of legislation. The Department of Home Affairs has also expanded its Trusted Employer Scheme, which allows approved companies to receive faster visa processing when recruiting senior executives, investors and people with critical technical skills.

For Tshabalala, the central question is not whether South Africa should regulate migration, but whether its policies recognise migration’s potential economic value. Whether the government’s ongoing reforms will reflect that argument, or be pulled in a different direction by political pressure on the ground, remains to be seen.