Jan 23

South Africans return from abroad

Angel-Jones-150x150South Africans are not returning in droves from living abroad, nor are returning emigrants necessarily bringing with them the type of intellectual and financial capital that the country needs.

This is the contrary view of some immigration specialists following the release of a report last week by recruitment firm Adcorp estimating that 359000 South Africans have returned from abroad over the past five years.

Adcorp labour economist Loane Sharp concedes that his figure is based on some “heroic assumptions”. It is inferred from Adcorp’s recruitment data showing that high-end wages have fallen significantly since 2008. Sharp presumes this is because the supply of highly skilled labour has been swelled by returnees, lessening SA’s skills shortage. However, Bureau for Market Research data shows that nominal incomes for this group rose over the period.

Western Cape-based immigration lawyer Gary Eisenberg finds Adcorp’s number of 359000 returnees “troubling and misleading” because it includes those who have lost their jobs as a result of the global financial crisis and been frozen out of faltering economies, including thousands of SA professionals on short-term contracts in Dubai who returned after the collapse of its building boom in 2008.

“South Africans are not returning in droves,” he says. “Only a very small fraction of those who emigrated are returning and in my experience none of them are bringing their capital back with them.”

They aren’t necessarily coming back forever, either, but rather because it suits them for tax reasons to be out of countries like the US or the UK for a few years, he says. Most rare, in Eisenberg’s experience, is the type of emigrant that SA most needs – young adults with special skills and the financial capital to invest in the SA economy.

This view is not universally shared, however. Owen Davies of immigration specialist firm Fragomen Africa says that in 2010 the firm dealt with five cases of African professionals seeking to return to the continent. Last year, it dealt with 500 cases.

“I don’t think returning is an emotional decision alone,” he says from his Johannesburg office. “They see immense career opportunities in Africa now that did not exist five years ago; that it’s a place that can catapult them forward much more quickly than Europe or North America.”

The Homecoming Revolution, a “repatriation platform”, reports a similar finding. “The global slowdown in 2008 did cause South Africans to return but more recently we’re seeing people return to the continent because they see it as a ripe and ready emerging market where their careers will be less boxed in,” says its CE, Angel Jones. “SA’s position [as a gateway to the continent] is seen as offering great opportunities.”

The actual number of South Africans returning could be a mere fraction of the 359000 or it could be double – the data from different sources is widely divergent. Stats SA does not track returning SA emigrants. The only official data is from the recent census. It identified that a mere 82801 South Africans previously resident outside the country had moved back to SA by 2008.

At the opposite extreme is the estimate by David Morgan, vice-president international pensions at Holborn Assets, that 500000 South Africans who had resided outside SA for at least five years have returned and that the number is rising rapidly. This is based on research conducted at the company’s call centres into South Africans with deferred pension benefits in Europe, mainly the UK.

The Homecoming Revolution estimates “conservatively” that 340000 South Africans have returned over the past 10 years, based on data from relocation providers like property agents and car importation firms combined with its own findings.

It also believes the pace of returnees is accelerating. Five years ago it said two South Africans were leaving for every one that returned but now it believes that ratio has completely reversed.

That something has shifted is corroborated by the World Economic Forum’s Global Competitiveness Report, which ranked SA 72nd out of 134 countries in 2008 in terms of its ability to retain talent. By 2013, SA had moved up to 51st out of 148 countries.

This is an impressive jump and an indication that for some the grass is no longer greener on the other side.