---
title: "After African migrants leave, who will run South Africa’s township economy?"
description: "South Africa has spent years arguing about African migrants. It has spent far less time thinking about what would happen if they left."
type: "OpinionNewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Opinionistas"
author: "Samuel Kehinde Okunade"
author_url: "https://www.dailymaverick.co.za/author/samuel-kehinde-okunade/"
canonical_url: "https://www.dailymaverick.co.za/opinionista/2026-07-17-after-african-migrants-leave-who-will-run-south-africas-township-economy/"
published: "2026-07-17T00:08:01"
lang: "en-ZA"
word_count: 1119
---

# After African migrants leave, who will run South Africa’s township economy?

> South Africa has spent years arguing about African migrants. It has spent far less time thinking about what would happen if they left.

By Samuel Kehinde Okunade · Published 17 July 2026, 02:08 SAST

## Content

![Image](https://cdn.dailymaverick.co.za/i/ToEp388PygKxbVnnboBpUQ3buys=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2025/09/label-Opinion.jpg)

If the [mass exit](https://www.dailymaverick.co.za/article/2026-06-18-african-migrants-with-deep-roots-in-south-africa-flee-xenophobic-attacks/) of African migrants after 30 June 2026 becomes a lasting reality rather than a temporary disruption, the country’s most immediate challenge may not be immigration management, but economic adaptation.

Across townships and informal settlements, thousands of businesses that quietly sustained neighbourhood economies risk disappearing almost overnight. The question is no longer whether migrants belong in South Africa. The question is whether South Africa is prepared for an economy without them.

For years, migrants have occupied an outsized role in the [country’s informal economy](https://www.dailymaverick.co.za/opinionista/2026-06-18-immigrants-make-an-enormous-contribution-to-the-food-security-in-south-africa/). Zimbabweans, Somalis, Ethiopians, Mozambicans, Nigerians and others became central players in township retail, street trading, transport, food distribution, repair services and countless micro-enterprises.

Their prominence was often cited as evidence that foreigners had “taken over” township commerce. Yet this framing overlooked a more important reality: they filled economic spaces that neither the state nor the formal private sector adequately served.

[FOR CONTEXT

What South Africa’s anti-migration fury keeps getting wrong

June 30, 2026 ![Image](https://cdn.dailymaverick.co.za/i/Aszgjygct0PYcJtA4RgS0-rN14o=/450x0/smart/file/attachments/orphans/6I1A5743_157859.jpg)](https://www.dailymaverick.co.za/article/2026-06-30-what-south-africas-anti-migration-fury-keeps-getting-wrong/)

Their departure leaves behind far more than empty spaza shops. It disrupts supply chains, weakens neighbourhood food security, interrupts informal credit systems and removes an entrepreneurial workforce that has become deeply embedded in local economies. The immediate consequences will be felt not in boardrooms but in households where informal commerce provides affordable goods, employment and daily survival.

### **Collective business ecosystems**

Many South Africans understandably see this moment as an opportunity. Vacated businesses create openings for local entrepreneurs who have long complained that migrant traders enjoyed unfair competitive advantages. It is entirely plausible that thousands of South Africans will seize this [opportunity](https://www.facebook.com/100063832650595/posts/south-africans-are-now-running-their-spaza-shops-some-are-now-dispatch-riders-mo/1519745493496525/) and establish their own enterprises. But replacing traders is easier than replacing business ecosystems.

The success of many migrant-owned businesses did not depend solely on individual hard work. It rested on collective systems that reduced costs and spread risk.

Somali traders developed cooperative purchasing arrangements that increased buying power. Ethiopian entrepreneurs organised highly efficient wholesale networks linking suppliers across provinces. Zimbabwean traders developed logistics systems connecting farms, wholesalers and township retailers.

Informal credit arrangements, pooled finance and family-based investment networks enabled businesses to survive despite limited access to formal banking. These commercial systems evolved over the years. They cannot simply be inherited with the keys to a storefront.

### **Dèja vu**

South Africa has already witnessed versions of this experiment. Following previous episodes of xenophobic violence, looted or abandoned migrant-owned businesses often remained closed for extended periods.

Where replacements emerged, they frequently struggled to replicate existing supply networks or maintain the same levels of competition. Consumers faced higher prices, fewer choices and less reliable access to essential goods. Economic disruption outlasted the violence itself.

There is little reason to believe that a much larger displacement would produce fundamentally different outcomes. This should not be interpreted as an argument that South Africans are somehow less entrepreneurial than migrants. Such claims are both [empirically weak](https://disruptafrica.com/2026/07/07/urgent-reform-needed-to-unlock-sas-startup-potential-report/) and politically unhelpful. Rather, the issue concerns incentives and institutions.

Many migrants entered self-employment because formal labour markets excluded them. Entrepreneurship was not simply an ambition; it was a survival strategy. South Africans, shaped by a different labour history, have often regarded [formal employment](https://www.statssa.gov.za/?p=19240) as the preferred route to economic security. The country’s exceptionally high unemployment has not always translated into equally high rates of informal entrepreneurship because aspirations, access to capital and perceptions of business risk differ.

### **Ironical prospect**

Whether these incentives change in the aftermath of 30 June remains uncertain. Less certain is that markets rarely tolerate prolonged vacuums. If township entrepreneurs cannot rapidly occupy abandoned commercial spaces, someone else almost certainly will.

That “someone” may not be another informal trader. It may be South Africa’s highly concentrated corporate retail sector. This possibility has received remarkably little attention.

South Africa’s major supermarket groups already possess extensive logistics infrastructure, sophisticated procurement systems, digital inventory management and access to capital that informal businesses cannot easily match. They have steadily expanded into township markets over the past two decades through smaller-format stores, franchise models and distribution partnerships.

A weakened informal sector would create precisely the conditions under which further corporate expansion becomes commercially attractive. The irony would be difficult to ignore.

Much of the political discourse surrounding migration has been framed around reclaiming economic opportunities for South Africans. Yet if migrant-owned enterprises disappear faster than local businesses can replace them, the principal beneficiaries may not be township entrepreneurs at all. They may instead be large corporations that already dominate South Africa’s formal economy. That outcome would deepen one of the country’s oldest structural problems: economic concentration.

South Africa remains among the world’s most unequal societies, with wealth and market power concentrated in relatively few hands. The informal economy has functioned as one of the few arenas where small entrepreneurs, both South African and foreign, have challenged this concentration. Thousands of independent businesses collectively created competition, lowered prices and retained income within local communities.

Corporate retail serves an important economic function, but it cannot fully substitute for the developmental role of informal enterprise. Informal businesses recycle earnings within neighbourhoods, extend credit to customers excluded from formal finance, employ family members and create accessible entry points for first-generation entrepreneurs. Their value lies not only in economic output, but also in social resilience.

Allowing these networks to disappear without deliberate replacement would therefore represent more than an economic adjustment. It would fundamentally reshape township economies.

### **Enterprise development**

The appropriate policy response is neither to romanticise migrant entrepreneurship nor to celebrate its disappearance. Both positions miss the larger issue.

South Africa needs a transition strategy.

If the objective is genuinely to increase South African participation in informal enterprise, then the government must move beyond immigration enforcement towards enterprise development. Affordable microfinance, simplified business registration, investment in township infrastructure, wholesale purchasing cooperatives and business incubation programmes would help local entrepreneurs build sustainable enterprises capable of replacing those that have disappeared. Without such interventions, ownership may change while economic exclusion persists.

The broader lesson extends beyond migration. The resilience of any economy depends not on the nationality of its entrepreneurs but on the institutions that enable entrepreneurship itself. Countries thrive when businesses can emerge, compete and innovate regardless of who owns them, provided they operate within fair and lawful regulatory frameworks.

The debate following 30 June should therefore move beyond the politics of who has left towards the economics of what remains. South Africa’s real test is not whether migrants can be removed from its informal economy. It is whether the country can prevent the vacuum they leave behind from accelerating the very concentration of economic power that successive governments have spent three decades trying and largely failing to dismantle.

That question, more than migration itself, will determine whether South Africa’s township economy emerges from this moment stronger or significantly weaker. **DM**