Anti-immigration protests are adding to the economic strain on an already fragile South Africa

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LAGOS – South Africa’s latest wave of anti-immigration protests is no longer just a security story. It is fast becoming an economic one.

The country was already under pressure from weak growth, stubborn unemployment, rolling power cuts and fragile investor confidence. Now it is facing another destabilising force: a sustained anti-immigration campaign that is disrupting urban commerce, unsettling local supply chains and adding a new layer of uncertainty to an economy that was already struggling to regain momentum.

The warning signs are already visible, in late June and early July, anti-immigration demonstrations triggered precautionary shop closures, the displacement of thousands of migrants, more than 900 arrests and the deployment of 3,405 soldiers at an estimated cost of R54.6 million, or about $3.37 million.

On its own, that bill will not derail South Africa’s public finances. But it is a signal of something more troubling: more state resources diverted to security, more pressure on businesses in low-income urban areas and more anxiety in an economy with very little room to absorb repeated shocks.

South Africa enters this episode from a weak position, the International Monetary Fund expects growth of only 1% to 1.2% in 2026, while broad unemployment remains above 40%. In an economy that is barely growing and struggling to create jobs, prolonged unrest does not need to be nationwide to do damage. It can chip away at consumer spending, business confidence and local economic activity one neighbourhood at a time.

That is what makes this episode especially worrying, unlike the July 2021 unrest, which caused an estimated R50 billion to R100 billion in losses, roughly $3 billion to $6.1 billion at current exchange rates, the current anti-immigration campaign is not one explosive event. It is a slower-burning crisis: repeated protests, threats of weekly marches, intimidation of migrant-owned businesses and recurring disruption in communities that depend heavily on informal trade.

The economic impact could be felt fastest in the urban informal economy, migrants make up roughly 4% of South Africa’s population, but they play an outsized role in township retail, logistics, food distribution, construction, agriculture and small services. When those workers and business owners stop moving, close their shops or leave their communities out of fear, the losses do not stop with migrant households. They ripple through neighborhood supply chains, transport networks and the fragile cash economy that sustains many low-income communities.

There is also a regional cost, South Africa sends about 27% of its exports to the rest of Africa and depends on the continent not only as a market, but as a political and commercial sphere of influence. A prolonged campaign against African migrants risks weakening that position, especially if it fuels diplomatic tension with neighboring countries whose citizens are among the most exposed to intimidation and violence.

Financial markets have so far remained calm, the rand has held relatively steady at around 16.2 to 16.4 against the US dollar, suggesting investors do not yet see the protests as a systemic shock. But that should not be mistaken for immunity.

In fragile economies, recurring social unrest does not always show up first in a currency selloff, it often appears earlier in weaker retail activity, delayed investment decisions, higher security costs and a growing sense that the state is losing its grip on stability.

The central risk, then, is not that anti-immigration protests alone will tip South Africa into recession, it is that they will deepen the problems the country already has: weak growth, social anger, fragile confidence and an economy becoming more expensive to hold together.