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07 May 2021

The socioeconomic contributions of migrant business owners in South Africa’s informal urban settlements and inner-city areas

Migrants and host communities in South Africa’s informal urban settlements often share harsh living conditions. Employment is scarce, and the communities have frustrations related to service delivery. The situation often leads to friction between the communities, which has escalated violently. There are indications that migrants, although often perceived to be part of the problem, do contribute to economic development and job creation in informal urban settlements. However, research on this topic is not extensive enough to inform government policy development and implementation. 
The overall objective of the study was to examine the socioeconomic contributions of international migrants in South Africa, with a specific focus on the city of Johannesburg. It covered in particular four inner-city areas (namely Berea, Hillbrow, Mayfair and Yeoville) and four informal settlements (namely Diepsloot, Ivory Park, Orange Farm and Zandspruit). Using a mixed methods approach, the study aimed at providing empirical evidence for municipal and national governments to develop policies that promote socioeconomic development, social cohesion and public–private sector investment in informal urban settlements. 
In five chapters, the report provides a contextual background and a review of literature on socioeconomic contributions of migrants, highlighting the gaps; the study methodology; findings; and conclusion and recommendations. 
The study found that migrant informal business contributes to the GDP, job creation, value chains and social cohesion.

  • List of figures
  • List of maps
  • List of tables
  • List of abbreviations and acronyms
  • Executive summary
  • Chapter 1
  • 1. Introduction
    • 1.1. Purpose of the research
    • 1.2. Outline of the report
  • Chapter 2
  • 2. Socioeconomic contributions of migrants: Literature and analytical framework
    • 2.1. Migration trends and patterns in South Africa
    • 2.2. Migrants’ activities and contributions to South Africa
    • 2.3. South African immigration policy landscape
    • 2.4. South African policy and responses to the informal economy
    • 2.5. Socioeconomic contributions of migrants: An analytical framework
  • Chapter 3
  • 3. Research methodology and approach
    • 3.1. Selected research areas
    • 3.2. Sampling
      • 3.2.1. Sampling and data collection challenges
    • 3.3. Data collection methods
      • 3.3.1. Survey
      • 3.3.2. Key informant interviews
      • 3.3.3. Focus group discussions
    • 3.4. Data analysis
  • Chapter 4
  • 4. Research findings
    • 4.1. Demographic characteristics of respondents
      • 4.1.1. Introduction
      • 4.1.2. Nationalities of respondents
      • 4.1.3. Distribution of respondents by sex 
      • 4.1.4. Distribution of respondents by sex and age
      • 4.1.5. Distribution of respondents by educational level
    • 4.2. Immigration status and income-generating strategies
      • 4.2.1. Distribution of respondents by immigration status
      • 4.2.2. Migration status by nationality and settlement
      • 4.2.3. Length of time operating business
      • 4.2.4. Respondents’ migration status by type of business
    • 4.3. Business activities engaged in by migrants and their socioeconomic contributions
      • 4.3.1. Types of business owned by migrants in the selected settlements
      • 4.3.2. Business size and revenue
      • 4.3.3. Customer retention strategies and business collaborations
      • 4.3.4. Economic contributions to local communities through product procurement
      • 4.3.5. Economic contributions through rental payments and utility costs
      • 4.3.6. Social contributions of migrant businesses to host communities
    • 4.4. Migrant-owned businesses and job creation in various economic sectors
      • 4.4.1. Introduction
      • 4.4.2. Creation of employment by migrant-owned businesses
      • 4.4.3. Nationalities of employees benefiting from migrant-owned businesses through employment
    • 4.5. Impact of regulatory frameworks on migrant-owned businesses
      • 4.5.1. Introduction
      • 4.5.2. Regulation and legislation
      • 4.5.3. Tax payment by migrant-owned businesses
    • 4.6. Challenges encountered by migrants wishing to conduct income-generating activities
  • Chapter 5
    • 5. Discussion and conclusions
    • 5.1. Key assessment areas
      • 5.1.1. Business activities engaged in by migrants and their socioeconomic contributions to the selected settlements
      • 5.1.2. Contributions of migrant-owned businesses to employment creation in the areas in which they operate
      • 5.1.3. Social contributions of migrant-owned businesses to the communities in which they operate
      • 5.1.4. Exclusion of foreign-owned informal businesses from business support policies
      • 5.1.5. Operational challenges
    • 5.2. Limitations of the study
      • 5.2.1. Quantifying GDP
    • 5.3. Conclusion
    • 5.4. Recommendations
      • 5.4.1. Recommendations for IOM and other international institutions working with migrants
      • 5.4.2. Recommendations for the city of johannesburg
      • 5.4.3. Recommendations for stakeholders and regulators in the small and medium-sized enterprises sector
  • Definitions
  • Appendix
  • References